Corporate Information

DIRECTORS Smt. Alice G. Vaidyan Chairman cum Managing Director w.e.f. 25.01.2016 Shri K. Sanath Kumar From 31.07.2015 upto 18.02.2016 Shri A. K. Roy Upto 31.07.2015 Smt. Snehlata Shrivastava Shri Arun Tiwari Smt. Usha Sangwan w.e.f. 06.04.2016 Shri Gopalan Srinivasan Upto 30.03.2016 Dr A. K. Saxena w.e.f. 07.06.2016 upto 30.6.2016 Shri Doulat Raj Mohnot Upto 03.01.2016 Shri G. C. Gaylong w.e.f. 27.01.2016 MANAGEMENT Chairman cum Shri A. K. Roy upto 31.07.2015 Managing Director Shri K. Sanath Kumar w.e.f. 01.08.2015 to 24.01.2016 (Acting CMD) Smt. Alice G. Vaidyan w.e.f. 25.01.2016 Director & General Shri G. C. Gaylong Manager General Managers Shri Y. Ramulu Shri R. K. Deka upto 31.01.2016 Shri P. Dutta upto 31.03.2016 Shri B. Balachandra upto 28.01.2016 (Deputation to IDBI Trusteeship Services Limited) Shri Dinesh R Waghela w.e.f. 10.08.2015 Shri B. N. Narasimhan w.e.f. 10.08.2015 Shri Pauly Sukumar N w.e.f. 10.08.2015 Smt. Usha Ramaswamy w.e.f. 10.08.2015 Chief Vigilance Officer Shri Ravi Chaudhary Deputy General Managers Shri P N Gandhi Upto 09.08.2015 (Transferred to Oriental Insurance Co. Limited as General Manager) Smt. Reena Bhatnagar Shri D.T. V. Sastri Shri V. C. Jain Shri Sushil Kumar Shri J. M. Gajendragadkar Shri Deepak Prasad upto 01.04.2016 (Deputation to GIC Re South Africa Ltd. w.e.f. 01.04.2016) Shri Farrukh Shah Upto 30.10.2015 Shri A. K. Agarwal Smt. Lakshmikala Raghupathy Shri Anil Sant Upto 30.04.2015 Smt. Madhulika Bhaskar Shri Deepak Godbole Shri Devesh Shrivastava Shri S. N. More Shri Charles G. Ashirvatham w.e.f. 17.08.2015 Smt. Suchita Gupta w.e.f. 17.08.2015 Smt. Girija Subramanian w.e.f. 17.08.2015 Shri Satyajit Tripathy w.e.f. 17.08.2015 Company Secretary Smt. Suchita Gupta Statutory Auditors M/s GBCA & Associate M/s. Samria & Co. Chartered Accountants Chartered Accountants Benefice Business House, 2E, Court Chambers, 35, III level, 126 Mathuradas Mills New Marine Lines Compound N.M Joshi Marg, Behind Aayakar Bhavan Lower Parel (w), Mumbai-400020 Mumbai-400 013. Secretarial Auditor SVVS & Associates, Company Secretaries LLP A- 403, Kukreja Centre, Sector 11, CBD Belapur, Navi Mumbai 400614 Registered Office “Suraksha”, 170, J. T. Road, Churchgate, Mumbai 400020 CIN U67200MH1972GOI016133 IRDAI Registration No. 112

ANNUAL REPORT 2015-2016 1 Corporate Chronicle

Sr.No. Date and Year Event 122nd November 1972 General Insurance Corporation of India was formed in the pursuance of section 9(1) of GIBNA Act and also under the Companies Act 1956 as Private Company limited by Shares. 21st January 1973 The general insurance business in India was nationalized, 107 general insurance companies was merged and GIC of India was formed as the holding Company with four subsidiaries viz, The New India Assurance Co. Ltd., National Insurance Co. Ltd., Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd. 31st January 1978 Loss Prevention Association of India was formed by GIC and its 4 subsidiaries. 46th December 1978 Kenindia Assurance Company Ltd, was incorporated by merging branch operations of subsidiaries of GIC and LIC operating in Kenya 51st January 1988 India International Insurance Pte. Ltd. was set up as a locally incorporated wholly owned subsidiary Company of GIC and four Public Sector Insurance Companies in Singapore. 612th December 1989 GIC Housing Finance Co. Ltd was set up by GIC of India and the four Public Sector Insurance Companies. 725th May 1993 GIC Asset Management Co. Ltd was set up by GIC of India and the four Public Sector Insurance Companies. 819th April 2000 Insurance Regulatory & Development Authority (IRDA) was formed 93rd November 2000 GIC notified as “Indian Reinsurer” 10 June 2001 London representative office set up 11 April 2002 Moscow representative office set up 12 20th December 2002 Agricultural Insurance Company of India was set up by GIC Re, the 4 PSU Companies and NABARD 13 April 2003 Life Reinsurance started its Underwriting activities. 14 1st April 2002 GIC Re appointed as managers to the Terrorism Insurance Pool 15 7th August 2002 GIBNA Act Amended 16 21st March 2003 GIC Re ceased to be holding Company 17 April 2005 Dubai representative office set up 18 February 2006 SAP went live. 19 27th April 2006 Loss Prevention Association of India was amalgamated with GIC Re 20 1st January 2007 Dubai representative office was upgraded to a Branch office 21 1st April 2007 GIC Re was appointed as managers to Motor Third Party Pool 22 1st January 2008 London representative office was upgraded to branch office and commenced its operations. 23 19th June 2008 Signing of Co-operation Agreement with Hannover Re for Life Re Business. 24 10th October 2008 Retakaful reinsurance 25 16th October 2008 GIC Re mandated to form Nat Cat Pool for Afro Asian Region. 26 16th January 2009 GIC Re registered as Eventual Reinsurer in Brazil 27 11th November 2010 GIC Re Malaysia Branch start functioning. 28 20th September 2011 Launch of e-Thru platform by Mr. J. Harinarayan, Chairman, IRDA 29 19th October 2011 GIC Re won the Marine Insurance Award at Seatrade Middle East and Indian Subcontinent Awards 2011 30 5th July 2012 GIC Re entered into a joint venture agreement for setting up the 1st Reinsurance Company in Bhutan. 31 26th November 2012 GIC Re won the Marine Insurance Award second time in a row, at Seatrade Middle East and Indian Subcontinent Awards 2012. 32 5th September 2013 The joint venture Reinsurance Company in Bhutan-GIC Bhutan Re Ltd. became operational 33 19th September 2013 GIC Re appointed as Managers of FAIR NATCAT Reinsurance Pool at Beijing, China 34 11th August 2014 GIC Re South Africa Ltd., the Wholly owned subsidiary of GIC Re in South Africa established. 35 12th June 2015 India Nuclear Insurance Pool launched 36 29th January 2016 GIC Re, India, Corporate Member Limited, the wholly owned subsidiary of GIC Re in UK established 37 4th February 2016 GIC Re converted into ‘Public Limited Company’ .

2 ANNUAL REPORT 2015-2016 BOARD OF DIRECTORS

(Left to Right): Mr. Arun Tiwari Mrs. Usha Sangwan Mrs. Alice G. Vaidyan Dr. A. K. Saxena Mr. G. C. Gaylong

ANNUAL REPORT 2015-2016 3 Board of Directors

Mrs. Alice G Vaidyan, Chairman-cum- Managing Director (DIN 07394437) Mrs. Alice G. Vaidyan, Chairman-cum-Managing Director, GIC Re, is the first lady officer to assume the post of Chairman of the National Reinsurer. She is also the first lady CMD in the public sector Insurance industry in India (both life and non-life). Mrs. Vaidyan was earlier CFO from 13.06.2014 till 04.09.2015 and General Manager from October 2012 till 23rd of January, 2016 when she was elevated as Chairman-cum- Managing Director of the Corporation. Mrs. Vaidyan is also non-executive Chairman of GIC Re South Africa Limited and GIC Housing Finance Limited. She is a Member of the Council of Asian Reinsurance Corporation as well. Mrs. Vaidyan is also a Director on the Board of Life Insurance Corporation of India, ECGC Ltd., Indian Register of Shipping, Kenindia Assurance Company Limited, and Health Insurance TPA Limited. A widely travelled (re)insurance executive with over 3 decades of experience, Mrs. Vaidyan is a well-recognised and acclaimed personality in the global reinsurance forums. Mrs. Vaidyan belongs to the 1983 batch of direct recruit officers of Indian general insurance industry. She began her career with the public sector general insurer, The New India Assurance Company Limited in 1983. Over the years, she worked in Thiruvananthapuram, Ahmedabad, Kochi and Mumbai offices of the Company, including the Corporate Office of New India Assurance Company Limited in various capacities. She moved to GIC Re in 2008 as Deputy General Manager (Reinsurance). A post graduate in English literature and a Fellow of the Insurance Institute of India, Mrs. Vaidyan has also trained at the Harvard Business School, Boston. She has won several national and international awards. She is a speaker of repute in national and international conferences. Mrs. Vaidyan received the Woman in Insurance Award in 2014.

Mrs. Snehlata Shrivastava, Secretary, Ministry of Justice (DIN 06478173) Mrs. Snehlata Shrivastava, Secretary, Ministry of Justice has been inducted on the Board of Directors of the Corporation. Mrs. Shrivastava is a Post Graduate in Geography with specialization in Urban Geography and M Phil in Regional Planning and Economic Growth. She is an Indian Administrative Service (IAS) Officer of 1982 batch (Madhya Pradesh Cadre). During her career in the IAS of more than 30 years, she has experience in the field of Finance, Telecom, Highways, Revenue, Multilateral Banks. i.e., World Bank and Asian Development Bank, Exchange Control, bilateral assistance in respect of US, Canada in Government of India. Mrs. Shrivastava has been instrumental in framing various Regulations under FEMA when it was enacted. In the State of Madhya Pradesh, she has dealt with the sectors like education, mining, land management, power and industry including law and order related assignments as District Magistrate and Sub-Divisional Magistrate. She has been Director, Budget in the Finance Department of State of Madhya Pradesh for three years. She joined Central Government on deputation from January 2011 as Joint Secretary, Department of Justice and dealt with higher judiciary of the Supreme Court and High Courts, judicial reforms and computerization of courts.

4 ANNUAL REPORT 2015-2016 Board of Directors

Mr. Arun Tiwari, Chairman and Managing Director of Union Bank of India (DIN 05345547) Mr. Arun Tiwari, Chairman and Managing Director of Union Bank of India is a M.Sc in Chemistry. He has also done a course in Computer Programming. Born on 1st July, 1957 Mr. Tiwari started his career in Bank of Baroda as Probationary Officer in 1979. Mr. Tiwari has worked in almost all key segments of Banking, in various capacities – at Branches, Zonal Office, and at Corporate Office as General Manager – MSME & Wealth Management, Whole sale Banking. His tenure in the Bank of Baroda spanned various geographies of the country and overseas centers at Kuala Lumpur and Singapore, as Chief Executive of the respective territories. He had the privilege to set up operations at both these Centers. He also worked in CMD’s Secretariat for two years. Mr. Tiwari was Head of Corporate Financial Branch, Mumbai, the largest branch of Bank of Baroda and also headed Greater Mumbai Zone of Bank of Baroda, in the rank of General Manager. On his elevation as Executive Director, Mr. Tiwari assumed the Office of Executive Director at Allahabad Bank from 18.06.2012 and handled the portfolios of CREDIT, Credit Monitoring, HR, IT, Risk Management, Finance & Accounts, Inspection, Vigilance and Branch Expansion & Support Services. Mr. Tiwari assumed the post of Chairman & Managing Director of Union Bank of India on the 26th December, 2013. Under the aegis of World Bank, Mr. Tiwari did a Study Assignment in USA and Europe for export oriented Small Scale Industries in India. He has undergone training and courses at various prestigious institutes like Arthur D’Little, Boston, USA, Kellogg School of Management, Northwestern University, Chicago, Indian School of Business, Hyderabad, NIBM, Pune, Bankers’ Training College, Mumbai, and Indian Institute of Technology, Mumbai, besides others.

Mrs. Usha Sangwan, Managing Director of Life Insurance Corporation of India (DIN 02609263) Mrs. Usha Sangwan is the first woman Managing Director of Life Insurance Corporation of India. She holds a Master’s Degree in Economics and a Post Graduate Diploma in Human Resource Management. She joined LIC as Direct Recruit Officer in 1981. Mrs. Sangwan is the Board Member of General Insurance Corporation of India, Axis Bank, Ambuja Cements Ltd., BSE Ltd. and Voltas Limited, Chairman and Director of LIC HFL Care Homes, Director on the Board of LIC (Singapore) Pte. Ltd., LIC (Lanka) Ltd. and LIC Cards Services Ltd., Member of Governing Council of National Insurance Academy, a Trustee of LIC Golden Jubilee Foundation, a Member of Policyholder Protection Committee, Executive Committee, Risk Management Committee and Investment Committee of LIC of India. She has worked in almost all core areas of life insurance including Marketing, Personnel, Operations, Housing Finance, Group Business, Direct Marketing, International Operations and Corporate Communications. She has held various important positions, such as Divisional Manager-Incharge of Delhi Division, Regional Manager (Personnel & Industrial Relations), Regional Manager (LIC Housing Finance), Executive Director (Direct Marketing & International Operations) and Executive Director (Corporate Communication). Her expertise lies in analytics, strategy, execution, people skill, use of technology particularly in marketing and servicing and setting up of systems. Achievements  She has been featured in Forbes List of 50 most powerful Business Women in Asia in 2015  She is also featured in Femina – Most powerful women in India  “Women Leadership Award” in BFSI sector by Institute of Public Enterprise  “Brand Slam Leadership Award” by CMO Asia  “Women Leadership Role Model” by Top Rankers Management Consultants  “CEO with HR Orientation Award” by Global HR Excellence arranged by Chartered Institute of Management Accountants  Also felicitated by Free Press Journal, Colour TV and Doordarshan for Women in Leadership Role.

ANNUAL REPORT 2015-2016 5 Board of Directors

Mr. G. Srinivasan, Chairman-cum-Managing Director, New India Assurance Company Ltd. (DIN 01876234) Mr G. Srinivasan, is a graduate in Commerce and Fellow of the Insurance Institute of India. He is also an Associate of the Institute of Cost & Works Accountants. An industry veteran with over 34 years of experience, Mr Srinivasan took over as Chairman-cum-Managing Director of New India Assurance Company Ltd., in October 2012. Currently, he is also the Chairman of The General Insurers’ (Public Sector) Association of India (GIPSA). Prior to joining New India Assurance Company Limited as CMD he was Chairman-cum-Managing Director of United India Insurance Company Limited. Mr Srinivasan has also served as the Managing Director of The New India Assurance Co (TNT) Ltd, Trinidad, and General Manager of New India Assurance Co Ltd. Mr. Srinivasan is also the Chairman of the National Insurance Academy, Pune and the Governing Body of Insurance Council. He is also a Director on the Boards of

 GIC Housing Finance Limited, Mumbai  The New India Assurance Co. (T&T) Ltd, Port of Spain  Prestige Assurance Plc., Lagos, Nigeria  India International Insurance Pte. Ltd., Singapore  GIC Re (in his capacity as the Chairman of The General Insurers’ (Public Sector) Association of India (GIPSA). Mr. Srinivasan has presented several papers in many National and International Conferences on various topics related to Insurance. Mr. Srinivasan has also been honoured with many awards including the Award for “ICON OF THE YEAR 2011” given by ICWAI for his contribution to the General Insurance industry; the SKOCH Award for Financial Inclusion Initiatives in 2012; CEO of the year 2013 Award in IPE BFSI Award and was awarded “CEO of the year” by 94.3 MY FM.

Mr. G. C. Gaylong, Director & General Manager (DIN 03025591) Mr. G. C. Gaylong, a direct recruit officer of the 1980 batch began his career in the Indian general insurance industry with the Oriental Insurance Company Limited. A graduate in Economics and Licentiate from the Insurance Institute of India, Mr. Gaylong served as Divisional In-Charge of DO Shimla and Chandigarh in Oriental and during these postings he was associated in servicing prestigious PSU clients like, Nathpa Jhakri Hydel Project, HMT, Semiconductor Complex, Bharat Electronics, HPSEB, Panipat Thermal Plant from 2003 to 2006, he was posted as Regional In-Charge of Oriental at Chandigarh and his Region was adjudged as Best RO in the year 2005. He also headed Chandigarh Regional Office of NIC as well from September, 2010 to October 2012. In August 2008, on his promotion as Deputy General Manager, he joined National Insurance Co. Ltd. in Head Office Marketing Department including Foreign Operations and Publicity. He was promoted as General Manager in the year 2012 and joined as a General Manager of National Insurance on 31st October, 2012 and thereafter on his transfer, he joined GIC Re on 30th June, 2014. At college, he was a keen sportsman and played cricket for the College XI and also won gold and silver medal for the long jump and the triple jump respectively in the inter university competition. He also represented Oriental in these two events in the first ever inter insurance co. athletic meet held at Nehru Stadium, Delhi in 1985.

6 ANNUAL REPORT 2015-2016 Board of Directors

Dr. A. K. Saxena, Chairman GIPSA and Chairman-cum-Managing Director Oriental Insurance Company Ltd. (DIN 05308801) Dr. A. K. Saxena, was a direct recruit of 1979 batch of General Insurance Officers. Dr. Saxena completed his Bachelor of Veterinary Sciences & Animal Husbandry from Pant Nagar University in 1976. Subsequently he completed his post-graduation in Bacteriology from Rohilkhand University in 1978. Dr. Saxena also qualified as a lawyer with a Bachelor of law degree from Rohilkhand University. He was also an Associate of the Insurance Institute of India. From 1979 to 2000 Dr. Saxena worked with New India Assurance Company in various positions in India and abroad. Subsequently, he moved to Kenindia, Kenya as General Manager and remained there till 2004 when on moving back to India he was posted as DGM In-charge of Mumbai Regional Office of New India Assurance Co. Ltd. In 2008 Dr. Saxena was promoted to the cadre of General Manager and in January 2008 posted to the Oriental Insurance Company Ltd. as General Manager In-charge of Marketing & Operations. In June, 2012, Dr. Saxena took over as Chairman-cum-Managing Director of Oriental Insurance Company Limited, where he continued till his superannuation in July 2016. Dr. Saksena was also a director on the Board of several companies during his tenure as CMD of Oriental Insurance Company Limited. These included GIC Housing Finance Ltd., Health Insurance TPA of India Ltd., NIA Pune and GIC Re.

ANNUAL REPORT 2015-2016 7 MANAGEMENT

Seated (Left to Right): General Managers - Usha Ramaswamy, B N Narasimhan, Y. Ramulu, Director - G.C. Gaylong, Chairman-cum-Managing Director - Alice G. Vaidyan, Chief Vigilance Officer Ravi Chaudhary, D. R. Waghela, Pauly Sukumar N.

Standing (Left to Right): Deputy General Managers - V. C. Jain, J. M. Gajendragadkar, Satyajit Tripathy, Charles G. Ashirvatham, Madhulika Bhaskar, Deepak Godbole, Reena Bhatnagar, Lakshmikala Raghupathy, DTV Sastri, Girija Subramaniam, Shashikant More, Akhilesh Kumar Agarwal, Sushil Kumar, Suchita Gupta

8 ANNUAL REPORT 2015-2016 Notice of Annual General Meeting

NOTICE is hereby given that the 44th ANNUAL GENERAL MEETING of the Members of the GENERAL INSURANCE CORPORATION OF INDIA will be held at the Registered Office of the Corporation at “Suraksha”, 170, J. Tata Road, Churchgate, Mumbai – 400 020, on Wednesday, the 28th September 2016 at 3.30 p.m. to transact the following :

Ordinary business

1. To consider and adopt the Financial Statements of the Corporation for the financial year ended 31st March 2016, the Consolidated Financial Statements for the said financial year and the Reports of the Board of directors and the Auditors.

2. To declare dividend on equity shares.

3. To fix the remuneration of Auditors for the year 2016-2017.

Special Business

4. Amendments to Articles of Association of the Corporation.

To consider, and if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 14 and all other applicable provisions of the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force, the new set of Articles of Association submitted to this meeting in substitution, which includes clauses in compliance with Disinvestment/IPO process be and are hereby approved and adopted.”

“RESOLVED FURTHER THAT any Director or Company Secretary of the Company be and are hereby severally authorized to do all such acts, deeds, matters and things including but not limited to making any applications, filing of any requisite forms with the Registrar of Companies, as may be necessary for the purpose of giving effect to the aforesaid resolution.”

By the Order of the Board of Directors For General Insurance Corporation of India

(Suchita Gupta) Company Secretary

Registered Office: “Suraksha”, 170, J. Tata Road, Churchgate, Mumbai – 400 020

Date: 19th September 2016

ANNUAL REPORT 2015-2016 9 Notice of Annual General Meeting

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF/ITSELF AND A PROXY NEED NOT BE A MEMBER OF THE CORPORATE. THE PROXY FORM IN ORDER TO BE EFFECTIVE MUST BE DEPOSITED WITH THE CORPORATION NOT LESS THAN 48 HOURS BEFORE THE TIME FIXED FOR COMMENCEMENT OF THE MEETING.

A person can act as a Proxy on behalf of Members not exceeding Fifty (50) and holding in aggregate not more than Ten percent (10%) of the total share capital of the Company. A Member holding more than Ten percent (10%) of the total share capital of the Company carrying the voting right may appoint a single person as a Proxy and such person cannot act as a Proxy for any other shareholder

2. A statement pursuant to Section 102(1) of the Companies Act 2013 relating to the Special Business to be transacted at the Meeting is annexed hereto.

3. Corporate Members intending to send their Authorized Representatives to attend the Meeting are requested to send a duly Certified Copy of Board Resolution authorizing their Representative to attend and vote at the Meeting.

10 ANNUAL REPORT 2015-2016 Notice of Annual General Meeting

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT 2013

Item No.: 4

The Corporation is planning to get its shares listed at the Stock Exchange (NSE and BSE) through IPO.

In order to align with the provision related to requirements of Listing with the Stock Exchange(s), it is proposed to adopt New Set of Articles of Association in accordance with the provisions mentioned under the Companies Act 2013.

The Board of Directors of the Company on 29th June 2016, has given its approval and accorded the consent for adoption of new set of Articles of Association of the Corporation.

The Board has recommended the Resolution for Members’ approval as a Special Resolution.

A copy of Articles of Association of the Corporation is available for inspection at the Registered Office of the Corporation during the normal business hours on working days.

None of the Directors, Other Key Managerial Personnels and Relatives of Directors and Key Managerial Personnels are in any way concerned or interested in the said Resolution except to the extent of their shareholding in the Corporation.

By the Order of the Board of Directors For General Insurance Corporation of India

(Suchita Gupta) Company Secretary

Registered Office: “Suraksha”, 170, J. Tata Road, Churchgate, Mumbai – 400 020

Date: 19th September, 2016

ROUTE MAP TO THE VENUE OF THE ANNUAL GENERAL MEETING

ANNUAL REPORT 2015-2016 11 Directors Report

To The Members,

The Directors have pleasure in presenting the Forty Fourth Annual Report on the working and affairs of the Corporation and the audited statements of account for the year ended 31st March, 2016.

We wish to inform you that the Corporation has been converted into a Public Limited Company w.e.f. 04.02.2016 with the approval of President of India and members of the corporation, at the Extra-ordinary General Meeting held on 4th February 2016. The face value of Shares of the Corporation has also been reduced from ` 100/- per Share to ` 1/- per Share at the same meeting.

FINANCIAL RESULTS

The highlights of the financial results for the year under review are as under: (` in crore) (` in crore) 2015-16 2014-15 2015-16 2014-15 1. Gross premium 18,435.81 15,183.97 12. Reserve for Doubtful Debts 2. Net Premium 16,374.78 13,857.01 and for Investment including 3. Net Earned Premium 15,172.84 13,558.25 Amortisation of Investments Written off 38.71 187.62 4. Net Incurred Claims 12,899.86 11,891.77 85.0% 87.7% 13. Profit before Tax 2,956.51 2,827.23 (9+10+11-12) 5. Net Commission 3,490.36 2,784.25 23.0% 20.5% 14. Income-tax Deducted at 6. Operating Expenses and Source and Provision for tax Other Outgo less Other including deferred taxes 108.12 133.51 Income 24.13 217.87 15. Profit after Tax 2,848.39 2,693.72 7. Investment Income (13-14) Apportioned to Revenue 16. Balance of Profit B/F from less expenses 2,802.72 3,024.82 previous year 0.08 0.09 8. Premium Deficiency -58.46 58.46 17. Interim Dividend - - 9. Total Profit/Loss (-) 1,619.68 1,630.71 18. Proposed Dividend 860.00 540.00 (3+7-4-5-6-8) 19. Dividend tax 175.08 109.93 10. Investment Income apportioned to Profit & 20. Transferred to General Loss A/c 1349.79 1,228.63 Reserves 1,813.30 2,043.80 11. Other Income less 21. Balance of Profit C/F 0.09 0.08 Other Outgo 25.75 155.51 (15+16-17-18-19-20)

(Net Earned Premium is arrived after adjustments for Reserve for Unexpired Risks) (Percentages relate to the net earned premium of the corresponding year) (Obligatory cessions from Domestic Insurance Companies reduced from 10% to 5% w.e.f. 01.04.13 wide IRDA/NL/RI/41/2012-13 date 03.03.2013) DIVIDEND During the year, the Directors recommended ` 860.00 CAPITAL AND FUNDS crore at the rate of 200% as the full and final dividend on date as against ` 540.00 crore at the rate of 125.61% Capital and Funds of the Corporation stood at ` 44394.91 in the previous year. crore as on 31st March, 2016 as against ` 40019.93 crore in the previous year, the details of which are given below:

12 ANNUAL REPORT 2015-2016 Directors Report

(` in crore) Explanation: As on As on 31.03.2016 31.03.2015 The Corporation is preparing Consolidated Financial Statements as it has two subsidiaries namely GIC Re Shareholders’ Funds South Africa Limited and GIC RE India Corporate Member (Net Worth) Limited, UK and two Associate Companies namely Paid up Capital 430.00 430.00 Agriculture Insurance Company of India Ltd. (AICIL) and General Reserve 14,402.30 12,589.00 India International Insurance Pte. Ltd., Singapore. Profit & Loss a/c 0.09 0.08 FINANCIAL RATING AND RANKING 14,832.39 13,019.08 Less: Deferred Tax Assets 2.43 17.47 A M Best reaffirmed the financial strength rating of Net worth 14,829.96 13,001.61 “A-(Excellent)” and the issuer credit rating of “a-” of Policyholders Fund 29,555.89 27,018.32 General Insurance Corporation of India (GIC Re) (India) in February 2016. The outlook for both the ratings is Total Funds 44,385.85 40,019.93 stable. The rating reflects GIC Re’s strong risk adjusted capitalization and business profile in its domestic market. Net worth (Shareholders Funds) for the last 5 years (` in crore) Credit Analysis & Research Limited (CARE) reaffirmed NET WORTH AAA(In) claims paying ability rating of GIC Re in 16000 14829.96 14000 13001.61 April 2016. This was based on strategic importance as 12000 10968.58 10000 9240.79 the sole national reinsurer, good solvency position and 8000 7685.46 comfortable liquidity profile. 6000 4000 th 2000 GIC Re is ranked 14 largest international reinsurer group 0 by A M Best based on Gross Reinsurance Premium 2011-12 2012-13 2013-14 2014-15 2015-16 Written in year 2014 and 18th by Standard and Poor based ASSETS on Net Reinsurance Premium written in year 2014.

Total assets of the Corporation were ` 79,548.75 crore SOLVENCY RATIO (including ` 5547.53 crore of Terrorism pool) as on 31st March 2016 as compared to ` 78093.32 crore The Solvency Margin of the Corporation as on 31st March (including ` 4782.84 crore of Terrorism pool) as on 2016 stood at 3.48 as against 3.04 in the previous year. 31st March 2015.

CONSOLIDATED FINANCIAL STATEMENT INVESTMENTS

Provisions regarding Financial Statements are laid down The book value of the investment of the corporation in under Section 129 of the new Companies Act, 2013. India (representing investment, loans & deposits) As per the provision of Section 129 (2) of the said Act, at amount to ` 34,050.25 crore as on 31.03.2016 as against every Annual General Meeting of a company, the Board ` 30,694.38 crore in the previous year. The Investment of Directors of the company shall lay before such Income of ` 4,174.99 crore were apportioned to Policy meeting financial statements for the financial year. Holder & Share Holder as under: Section 129 (3) of the Companies Act, 2013 provides that (` in crore) where a company has one or more subsidiaries, it shall, in addition to financial statements provided under Apportioned to Policyholders 2,818.63 sub-section (2) of Section 129, prepare a consolidated financial statements of the company and of all the Apportioned to Shareholders 1,356.36 subsidiaries in the same form and manner as that of its own which shall also be laid before the Annual General The mean yield on funds with profit on sale of Meeting of the company along with the laying of its investments stood at 12.91%. The net NPA% financial statements under sub-section (2) of Section 129. (Non-Performing Assets) was at 1.08%.

ANNUAL REPORT 2015-2016 13 Directors Report

INSURANCE REGULATORY AND DEVELOPMENT acceptable level through a combination of preventive AUTHORITY OF INDIA (IRDAI) measures, recovery controls and alternate arrangements. Business Continuity Planning aims at providing The Corporation being a Reinsurance Company, its continuity of services at a defined minimum acceptable working and functions, are governed by the Insurance level of critical functions and to safeguard the financial, Regulatory and Development Authority of India (IRDAI). competitive and reputational position in the short and The Corporation’s existing paid-up equity capital of medium term. ` 430 crore conforms to the specifications of the IRDAI. The Accounts of the Corporation are drawn up according During the year under review, a stress test exercise to the stipulations prescribed in the IRDAI (Preparation conducted by our consulting Actuary evaluated of Financial Statements and Auditor’s Report), scenarios of significant adverse threats to the future Regulations, 2002. financial condition of GIC Re and the results of the same were found to be satisfactory. ENTERPRISE RISK MANAGEMENT Standard Operating Procedures (SOP) for two key The Corporation has in place a robust ERM policy. The functions of the Corporation viz: Reinsurance and policy defines a Governance structure as well as the roles Investment and their related accounting activities have and responsibilities at each level. The ERM department been duly documented. While SOP for investment is headed by the Chief Risk Officer (CRO) who reports to function is fully implemented, the implementation for the Board level ERM committee through the Chairman Reinsurance is in process. cum Managing Director (CMD) and Management level ERM committee. ERM department conducts risk and CORPORATE SOCIAL RESPONSIBILITY (CSR) control assessment with the assistance of the Risk and REPORTING Mitigation Plan Owners (RMOs) whereby risks are re-calibrated; new risks are brought for discussion The Corporation is having a Corporate Social followed by prioritization of risks. RMOs also propose a Responsibility Policy (CSR Policy) indicating the activities control/mitigation plan during this exercise. The to be undertaken by the Company, which has been department conducts periodic review of the risk approved by the Board. universe, controls and implementation and its The CSR Policy may be accessed on the Company’s effectiveness and keeps the Management and Board website at the link: http://gicofindia.com/images/pdf/ ERM Committees duly informed of developments and CSR-Policy-with-amendment.pdf. deviations.

The CSR Reporting as per Section 135 of the Companies During the year under review, ERM department has gone Act, 2013 is given in Annexure I. live with software solution for ERM viz GIC Risk Pro on 10th of June 2015. This software records the identified AUDITORS AND AUDIT REPORT risks and their mitigation plans and facilitates monitoring and control process. The Key Risk Indicators (KRIs) which STATUTORY AUDITORS are used to fix the risk tolerance limits are also captured in GICRiskPro. The software is integrated with the base GBCA & Associates, Chartered Accountants and Samria SAP system of Corporation to enable KRI values to & Co., Chartered Accountants were appointed as joint automatically move from base system to GICRiskPro. Auditors to audit the accounts of the Corporation for the This system is also beneficial in giving the alerts to the financial year 2015-16 by the Comptroller & Auditor KRI owner if the KRI thresholds are breached. General of India under Section 139 and Section 143 of the Companies Act, 2013. As part of its allied activities, the ERM department reviews the Business Continuity Plan (BCP) annually. The Auditors Report does not contain any qualification, The purpose of BCP is to minimize the impact on the reservation or adverse remark. organization of any significant business disruption to an

14 ANNUAL REPORT 2015-2016 Directors Report

SECRETARIAL AUDIT under the Companies (Accounts) Rules, 2014 as regards Conservation of Energy or Technology absorption. The Board has appointed SVVS & ASSOCIATES, Company Secretary LLP to conduct Secretarial Audit for the PERSONNEL AND INDUSTRIAL RELATIONS financial year 2015-16. I. STAFF POSITION AS ON 31.03.2016 The Secretarial Audit Report does not contain any Class I - Officers 454 qualification, reservation or adverse remark. Class III - Clerical Employees 81 Pursuant to Section 204 of the Companies Act, 2013, the Class IV - Sub-Staff 23 Secretarial Audit Report of the Corporation is given in TOTAL 558 Annexure II. Composition of Scheduled Castes and Scheduled EXTRACT OF ANNUAL RETURN Tribes in the employee Strength Cadre Total Composition Extract of Annual Return (Form MGT 9) of the Company Employee is annexed herewith as Annexure III to this Report. Strength MANAGEMENT DISCUSSION & ANALYSIS REPORT SC % ST % Officers 454 66 14.54 26 5.73 The operations and future prospects of the Corporation Clerical 81 22 27.16 10 12.35 is dealt in the Management Discussion and Analysis Sub-Staff 23 5 21.74 1 4.35 Report which forms part of the Directors Report. Total 558 93 16.67 37 6.33 FOREIGN EXCHANGE EARNINGS & OUTGO AND OTHER INFORMATION II. WELFARE OF SC/ST/OBC:

The particulars of Foreign Exchange earnings/outgo as As per the National Policy on reservation for SC/ST & OBC, required by the Companies (Accounts) Rules, 2014 is GIC Re has framed rules, which allow reservations and given below: concessions/relaxation for SC/ST and OBC in recruitment and promotion wherever applicable. Special in-house i) Earnings ` 2586.16 crore training classes are conducted for SC/ST employees who ii) Outgo ` 2043.18 crore are in the promotion zone in order to enable them to acquire knowledge so that they are able to give a better The earnings included all receipts denominated in account of themselves in the written test. The foreign currencies in respect of premium, recovery of Corporation also organizes pre-recruitment trainings claims, outward commission and investment earnings. through the Recruitment Agency for the SC/ST The outgo comprised all payments in foreign currency candidates who apply for the recruitment examination in respect of outward premium, claims on reinsurance on All India Basis. accepted, commission and expenses of management. DISCLOSURE UNDER THE SEXUAL HARASSEMENT Expenses on (a) Entertainment (b) Foreign Tours and OF WOMAN AT WORKPLACE (PREVENTION, (c) Publicity and Advertisement amounted to PROHIBITION AND REDRESSAL) ACT, 2013 ` 12,76,935.52, ` 5,90,71,814.07 and ` 5,44,11,414.80 respectively for the year under review. The Company has been employing women employees in various cadres within its office. The Company has in CONSERVATION OF ENERGY, TECHNOLOGY place a policy against Sexual Harassment in line with the ABSORPTION requirements of the Sexual Harassment of Women at The Corporation is not engaged in any manufacturing Workplace (Prevention, Prohibition and Redressal) Act, activity and as such there are no particulars to disclose 2013. All employees are covered under the policy.

ANNUAL REPORT 2015-2016 15 Directors Report

There was no complaint received from any employee A chaupal was organized under the banner of Town during the financial year 2015-16 and hence no Official Language Implementation Committee (TOLIC). complaint is outstanding as on 31.03.2016 for redressal. The subject of the Chaupal was “Social Media, Digital India and Hindi.” Chief Guest of the programme was Mrs. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY Alice G. Vaidyan, Chairman cum Managing Director of GIC OF THE CENTRAL GOVERNMENT Re and special guest was Senior Radio Persona Mr. Ameen Sayani. Public Sector Undertaking-members During the year under review, the Corporation improved of TOLIC were attended the chaupal and made it its performance in implementation of Official Language successful. Policy of the Government of India and complied with the guidelines issued by the Ministry. VIGILANCE

For implementation of Official Language Policy of the The Vigilance Department of the Corporation is headed Government, regular inspections of Departments by a Chief Vigilance Officer in the rank of General situated in head office, Mumbai and liaison offices in Manager. The emphasis of the Vigilance Department is Delhi, Kolkata and Chennai were carried out by the on preventive vigilance. officials of Official Language Department. The Department also focuses on various systems Four In-house workshops were organized and four improvement initiatives. meetings of Official Language Implementation Committee were conducted during the year. Apart from The focus of the Organization, in concurrence with CVC the regular translation work, translation of Annual Report guidelines, is to take proactive steps to avoid a vigilance- and Financial Standing Order (FSO) was carried out. like situation. Audit reports are studied and remarks made by Auditors are analysed. Surprise inspections are In-house quarterly journal KSHITIJ was published conducted periodically and lapses studied from a regularly. It was also made available on Company’s vigilance angle. Based on this, suggestions are advised website. During Hindi fortnight, various competitions for improvisation of systems and procedures of the were organized. The winners of these competitions were Organisation. The purpose is to focus and accept awarded prizes during a cultural programme. vigilance as an organizational objective and create an atmosphere conducive to “Zero corruption” functioning, CMD’s Shield was awarded to Human Resources with role clarity and clear sense of direction. To improve Department and certificates were given to General vigilance administration, CVO and other officers also Accounts Department, Vigilance Department and participate in the vigilance training programmes/ Secretarial Department as these departments were workshops conducted by reputed organisations. found to be the best performing departments of the Periodical discussions are held with the officials of Corporation with regards to Official Language various departments/companies to ensure financial and Implementation. office discipline and imbibe a culture of value and ethics Almost all Officers and Employees are having working in the organization. knowledge of Official Language and 5 newly recruited INTERNAL AUDIT DEPARTMENT officers are yet to be trained in Hindi. They will be sent for training shortly. The Corporation has systems and controls in place covering all major areas of operations such as Out of 533 personnel of GIC Re, 172 are proficient in Underwriting, Investment and Finance. The objective of Hindi. the Internal Audit Department is to critically appraise the adequacy and effectiveness of the various systems and Akruti based UNICODE has been installed on the controls in the various areas of operation of the computers. Officers and Employees are able to do their Corporation, with a view to facilitate the Management day to day work in Hindi also. to strengthen the overall governance mechanism.

16 ANNUAL REPORT 2015-2016 Directors Report

To achieve the objective, the Internal Audit Department Subsidiary Government Ledger (SGL) for Central and has utilized the services of professional audit firms. State Government Securities were subjected to During the year 2015-16, M/s Kailash Chand Jain & Co. concurrent audit and confirmation of correctness of being eligible for re-appointment continued as Internal balances, and its reconciliation at the end of each month Auditors for Reinsurance Operations and Business were sent to RBI. The same were also placed before the Accounts for 2015-16. M/s R. Devendra Kumar & Audit Committee at its meetings. Associates being eligible for re-appointment continued as Internal Auditors for Investment Operations and other The major contributions of the auditors during the year functions for 2015-16. include appraising the management of the scope of improvement in cash call servicing, broker-wise and The Internal Audit Department also appoints Auditors cedant-wise receivable management, reduction in for the foreign branches of GIC Re in London, Dubai and unappropriated amounts, and streamlining of Malaysia and representative office in Moscow. outstanding loss reserves. The Audit function in the Corporation has brought about improvement in data Besides, the following special audits were also arranged quality, acceleration in claim processing, streamlining of by the Internal Audit Department: process of accounts receivable management in the Reinsurance Operations. By critically appraising the 1. Secretarial Audit Management of the Corporation of the various systems 2. RTI Audit and processes, the Internal Audit Department facilitated 3. Deliverables Audit to strengthen the overall governance mechanism. 4. Motor Pool Financial Audit During the year, the Internal Audit Department placed 5. FAIR Nat Cat Pool before the Board and the Audit Committee the status of The Internal Audit Department functions independently Comptroller & Auditor General of India (CAG) Draft Paras under the supervision of the Audit Committee of the (DPs) and Inspection Reports (IRs) Board. The Audit reports of GIC Re Head Office and RTI ACT, 2005 Foreign branches are placed before the Audit Committee of the Board for their consideration and directions. The Corporation has in place the stipulated structure to implement the RTI Act 2005, in the Organization. Six (6) meetings of the Audit Committee of the Board The Setup is headed by a General Manager designated were held during the year 2015-16. Action Taken Reports as the Transparency Officer. A General Manager functions were presented to the Audit Committee to report the as the Appellate Authority, a Deputy General Manager status of progress on the implementation of the is the Central Public Information Officer, an Assistant directions of the Committee. General Manager discharges the duties of Assistant During the year, emphasis was laid on core business Public Information Officer under the provisions of the activities and audit of Reinsurance underwriting Act. An Assistant Manager is nominated as the Nodal operations, settlement of outstanding accounts & Officer. reconciliations of broker balances. Other departments The Corporate website www.gicofindia.com hosts like Human Resources, IT, Communication, General information as relevant to the Corporation, under the Act Accounts, Office Services etc. were also covered during which is updated from time to time. GIC Re has complied the year. Besides major expenditures incurred, both with the guidelines issued by Ministry of Personnel, Revenue and Capital, having financial implications were Public Grievance & Pensions, Department of Personnel also subjected to audit. Treaty acceptances, Cash Call and Training, regarding Implementation of suomotu settlements and Settlement of Accounts were audited disclosure u/s 4 of the RTI Act, 2005. The suomotu on concurrent basis. disclosures are audited as envisaged in the guidelines. Audit of Investment Operations was conducted on concurrent basis. This covered the primary and During the period under review (2015-16) the secondary market transactions. In line with RBI directions, Corporation received Fifty Applications and Eight First

ANNUAL REPORT 2015-2016 17 Directors Report

Appeals under the RTI Act, 2005. All the Applications were TRAINING/HRD duly replied and Appeals were disposed off well within the stipulated time. No Second Appeals were filed Today’s work environment often requires officers to be against the Corporation during the period under review. independent thinkers responsible for making good decisions based on limited information. Training INFORMATION TECHNOLOGY MANAGEMENT GROUP enhances these skills. The focus of training department (ITMG) is to help you recognise how best to meet your staff’s personal development needs while, at the same time, The Information Technology Management Group of ensuring the maximum benefit for business. GIC Re has adopted the vision of being responsible for Communicating with staff, identifying their short and generating value through the use of technology. long-term development needs and creating an action The department provides the IT resources for the plan to deliver these, are key factors in meeting these Corporation and ensures that the latest technology in objectives. Learning/Training is necessary process of hardware, software and networking is implemented in achieving business objectives and essentials to improve the organization. organisational performance. It bridges the gap between The technology platform of the organization is state-of- the organisation current capability and that needed to the-art. There is a Business Continuity Plan (BCP) for IT deliver business results. operations designed to reduce risk from unexpected In the year 2015-16 training was imparted to all levels of disruption of the critical functions/operations. DR drill employees both internally and externally. Various of the core applications has also been carried out during programmes were conducted for the employees at the year. An Enterprise Risk Management framework has GIC Learning Academy, National Insurance Academy, been put in place and the risk parameters are being Pune and other Reputed Institutes. Many soft skilled monitored by software that is implemented for the programmes as well as technical based programmes purpose. Electronic transaction processing with the were initiated. business partners is enabled through the use of a portal and a messaging gateway. The Summary of various programmes organized by NIA, other reputed organizations and GIC Re Learning Information Security Policy has been adopted by the Academy are indicated below: organization. The security infrastructure is reviewed and audited through certified auditors regularly. Organization No of No of Programmes officers/ INDIAN MOTOR THIRD PARTY DECLINED RISK INSURANCE POOL (IMTPDRIP): employees trained The IMTPDRIP has been in operation since 01.04.2012 In house programmes 25 225 and is in the 4th year of operation. National Insurance 22 83 The process of Annual clean cut settlement in respect Academy, Pune of DR Pool liabilities for the year 2014-15 was completed @ 184% of Ultimate Loss Ratio (ULR). Insurance Institute 18 65 of India During the year 2015-16, the total number of Member Other reputed 30 165 Companies was 22 and have ceded premium of ` 203 organisations crore (11.26% decrease over previous year) from 1.5 lakh policies (26.11% decrease over previous year).* Seminars/Conferences/ 6 43 Summits Vide order dated 15th March 2016, the IRDAI decided to International Training 6 148 dismantle the Pool with effect from 1st April, 2016. Programmes conducted *taken upto Q3/2015-16 & Comparison with upto for cedant companies as Q3/2014-15 part of marketing strategy Foreign Trainings 7 15

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In addition to the above following trainings were Impact Study of Training Programme organized The trainings were conducted for our officers/employees 1. Induction Training – for enhancement of existing skills, updating the techniques in respective departments. The end result of  52 Direct Recruits through Insurance Institute such trainings is that these concerned personnel are of India (6 week duration covered both aspects better equipped to handle new challenges that arise in of insurance as well as Reinsurance) the growing business scenario. Trained officers do work better and more efficiently, have positive attitude.  Assignments on product design related to The resultant impact of Training is to improve drive, insurance were given to Direct Recruits. initiative and quality of work output of the employees/  Medals were awarded to the best three product officers. It indirectly makes them more committed to design achieving goals and objectives of the Corporation.

2. Specialized programme-4 day Advanced Excel OVERSEAS EXPANSION programme conducted three times at Insurance Institute of India. Overseas Expansion of operations, through branch offices, subsidiaries and joint ventures are an integral part 3. As a marketing strategy, 6 International training of the business growth strategy. Expansion plans are programme on various topics were imparted for our drawn basing on study of market opportunities, Overseas Associates of GIC Re. 6 specialised supported by understanding of the business and programmes were conducted in association working environment in prospective markets. The with Insurance Institute of India in the financial decisions are based on sound business research coupled year 2015-16 as a part of marketing strategy. with prevailing regulatory structures and requirements. The programmes conceptualised specifically for our GIC Re has always demonstrated its commitment to participants from overseas cedant companies in building and supporting the insurance markets of neigh- Asian and African market. bouring SAARC countries. It has ensured support to the insurance industry and regulators in SAARC and Africa  Reinsurance Management May, 2015 by providing technical inputs, imparting training and  Takaful Insurance July, 2015 providing capital support, whenever, situation demands.  General Insurance- Fire, Project and Mega lines September, 2015 GIC Re has been organizing and participating in major insurance events, including participation at the Annual General Insurance Liability November, 2015  South Asian Insurance Regulators’ Meet and Conference.  Reinsurance Management January, 2016 Scaling up of Moscow Representative Offices to  Programme on Oil and Energy February, 2016 full-fledged business offices is now on the agenda.

4. Mandatory Programme of “Prevention of Sexual INVESTMENT IN INSURANCE COMPANIES Harassment at Workplace” conducted for women DOMESTIC OPERATIONS employees AGRICULTURE INSURANCE COMPANY OF INDIA LTD. 5. Specialised Programme on “Subordinate (AICIL) Development & Coaching” was conceptualised to train the Middle Management Cadre (especially for The Corporation holds 35% equity of AICIL and NABARD Scale III & IV). holds 30% while the balance is held equally to the extent of 8.75% by the four public sector non-life insurance 6. SAP related trainings conducted at E-learning Centre Companies. The Company has not declared any dividend on various RI modules for the financial year 2015-16.

ANNUAL REPORT 2015-2016 19 Directors Report

OVERSEAS OPERATIONS The total shareholding of GIC Re in the Company is 10 mn shares each of 1 S$. GIC Re has 4 overseas offices viz; a Representative Office in Moscow and Branch Offices in London, Dubai and The Directors have recommended a first & final Malaysia. dividend of 10 cents per share for the financial year 2015. The Corporation has exposure in the share capital of Kenindia Assurance Company Ltd, Kenya, India  ASIAN REINSURANCE CORPORATION, BANGKOK International Insurance Pte Ltd, Singapore, Asian Reinsurance Corporation, Bangkok, and East Africa The Corporation is holding 9.23% of the share capital Reinsurance Company Ltd., Kenya. as Associate Member of Asian Re in addition to holding 1.25 % of the share capital as its Regular  LONDON BRANCH (UK) Member on behalf of the Government of India. During the current financial year 2015-16, the Gross The Company has not declared any dividend for the Premium written by the Branch was GBP 51.04 mn year 2015. compared to GBP 43.83 mn last year and earned a profit of GBP 8.11 mn as against a profit of GBP 3.51  EAST AFRICA REINSURANCE COMPANY LTD., mn last year. KENYA

 DUBAI BRANCH (UAE) The Corporation has 14.75% stake in the share capital of East Africa Reinsurance Company Ltd., an During the current financial year 2015-16, the Gross existing profit making reinsurance company in Premium written by the Branch is AED 1,158.21 mn Kenya. The total shareholding of the Corporation is compared to AED 1,119.55 mn last year and incurred 191,777 shares of 1000 Kshs, as on 31st March, 2016. a loss of AED 223.95 mn as against a loss of AED 357.45 mn last year. The Company has declared a dividend of 46.15 Kshs per share for the financial year ended  MALAYSIA BRANCH 31st December 2015.

During the current financial year 2015-16, the Gross  GIC Bhutan Re Ltd. Premium written by the Branch was RM 483.98 mn compared to RM 447.08 mn and incurred a loss of The maiden reinsurance company of Bhutan is a RM 282.26 mn as against a loss of RM 138.85 mn. Joint Venture between the Corporation and local Bhutanese promoters. The venture began its  KENINDIA ASSURANCE CO. LTD., KENYA operations in the name ‘GIC Bhutan Re Ltd’ in The paid up share capital of the Company is Kshs December 2013. 561 mn. The total shares held by GIC Re is 515,777 shares of Kshs 100 each as on 31.12.2015. The Corporation has a 26% stake in the Joint Venture The Corporations’ holding in the share capital of the and held 13,000,000 shares of value Nu 10 each as st Company is 9.19%. of 31 December, 2015. The rest of the shareholding is divided between two Local Bhutanese promoters Kenindia has declared a dividend of Kshs 10 per with 17% stake each and 40% shares are held by the share for the year ended 31st December, 2015. public.

 INDIA INTERNATIONAL INSURANCE PTE. LTD.  GIC Re South Africa Ltd. SINGAPORE GIC Re South Africa Ltd is the Corporation’s first 100% Corporation holds 20% shares in India International owned subsidiary (Wholly owned subsidiary) Insurance Pte. Ltd., which has a share capital of S$ operational since October 2014. 50 million.

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The Corporation held 5,750,000 shares of value ZAR DECLARATION OF INDEPENDENT DIRECTORS 2 each, constituting 100% of GIC Re South Africa Ltd’s equity as of 31st December, 2015. As per Section 149, the Corporation has received declaration of Independence from Mr. D R Mohnot,  GIC Re, India, Corporate Member Limited Independent Director.

With the ambition of becoming a reputed Global DIRECTORS RESPONSIBILITY STATEMENT reinsurer and enhance its global footprint, GIC Re wanted to expand into alternative markets such as Pursuant to the provisions of section 134 of Companies Lloyd’s of London. GIC Re has plans to offer Act 2013, the Directors confirm that: reinsurance capacity to Lloyd’s syndicates through 1. In the preparation of annual accounts, the applicable quota share capital gearing treaties which Lloyd’s Accounting Standards have been followed along Syndicates arrange from non-Lloyd’s markets for with proper explanations relating to material capital efficiency. While offering quota share departures; reinsurance to Lloyd’s syndicates, it becomes necessary to have own Corporate Membership at 2. Appropriate accounting policies have been selected Lloyd’s as a capacity provider, which is established and have been applied consistently and have made as a private limited company registered in the UK. judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state With this objective, GIC Re acquired an existing of affairs of the Corporation at the end of the Corporate Member company namely I-CAT CCM TEN financial year 2015-16 and of the profit or loss of the Ltd which was underwriting business on Syndicate Corporation for the period : 4242 with reinsurance support from GIC Re. The process of acquisition was completed in November 3. Proper and sufficient care has been taken for the 2013 when Lloyd’s granted consent for GIC of India maintenance of adequate accounting records in to become the controller of ICAT CCM TEN Ltd and accordance with the provisions of this Act for the name of the Corporate Member was changed safeguarding the assets of the Corporation and for to GIC Re, India, Corporate Member Ltd which was preventing and detecting fraud and other registered with Companies House in UK. irregularities;

GIC Re, India, Corporate Member Ltd provided 4. The annual accounts have been prepared on a going capacity to Syndicate 6119 in 2014 and Syndicates concern basis. 6118 & 6119 in 2015. The premium underwritten is GBP 14.05 million in 2014 and GBP 18.47 million in 5. Proper systems has been devised to ensure 2015. The business underwritten by GIC Re, India, compliance with the provisions of all applicable laws Corporate Member Ltd is fully reinsured with GIC Re. and that such systems are adequate and operating.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY Domestic (India): Following are details of three major losses which occurred during the month of April and May 2016: Name of Insured Cause of Date of Loss Cedent 100% loss GIC’s share GIC’s share loss (` crs.) of Gross loss of Net loss (` crs.) (` crs.) Biomax Fuels Fire 26.04.2016 SBI General 104.53 42.95 42.95 Vedanta Ltd Fire 27.05.2016 United India 93.00 40.13 40.13 Subros Ltd/Maruti Fire 29.05.2016 National Insurance/ 459.00 165.28 100.00* Suzuki India Ltd. Universal Sompo General Insurance * claim recoverable above ` 100 crs. from our Reinsurance Protection Programme

ANNUAL REPORT 2015-2016 21 Directors Report

Foreign : There were three Major Foreign Events, in April & May 2016, details of which are as follows: Name of the Cause Date of Cedent GIC’s share GIC’s share GIC’s share GIC’s share Event of loss Loss of Gross loss of Net loss of Gross loss of Net loss (USD mln.) (USD mln.) (` crs.) (` crs.) Sri Lanka Floods Flood May 2016 Various 6.43 6.43 43.10 43.10 Ecuador EQ Earthquake 16.04.16 Various 3.55 3.55 23.74 23.74 Egypt Air Crash 19.05.16 MISR/Arab Misr 2.76 2.76 18.50 18.50

GENERAL MEETINGS SUBMISSION OF ACCOUNTS BEFORE PARLIAMENT

The last three Annual General Meetings were held at the As confirmed by the Ministry of Finance, Insurance Registered Office of the Corporation at “Suraksha”, 170, Division, the Annual Report of the Corporation for the J. Tata Road, Churchgate, Mumbai-400 020 on the year 2014-15 along with Directors Report were placed following dates:- before both the Houses of Parliament under Section 394 of the Companies Act, 2013 as per details given below: 17th July 2015 10th September 2014 LOK SABHA 11th December 2015 11th July 2013 RAJYA SABHA 15th December 2015

An Extra Ordinary General Meeting of the Corporation ACKNOWLEDGEMENT was also held at the Registered Office of the The Board places on record its deep appreciation of the Corporation at “Suraksha”, 170, J. Tata Road, Churchgate, agents, brokers, staff and officers of the Corporation for Mumbai-400 020 on 4th February, 2016. their valuable contribution in achieving its plans and BOARD MEETINGS goals. The Directors are thankful for the guidance and support extended by Ministry of Finance, IRDAI, and The number of Board meetings held during financial year Principal Director of Commercial Audit and Ex-Officio 2015-16 of the Corporation were Seven (7) and these Member, Audit Board- I, Mumbai. are as follows: For and on behalf of the Board 24th April 2015 30th May 2015

th 17 July 2015 Alice G. Vaidyan 4th September 2015 Chairman-cum-Managing Director 30th November 2015 23rd December 2015 18th February 2016 Date : 29th June, 2016 Place : Mumbai

22 ANNUAL REPORT 2015-2016 CSR Report - Annexure-I

Annexure - I 2. Composition of CSR Committee: Smt. Alice G Vaidyan, CMD The Annual Report on CSR Activities Smt. Snehlata Shrivastava, Additional Secretary, 1. Brief outline of CSR policy: Department of Financial Services, Ministry of Finance

To strive to transform India into a risk- aware society Shri G. Srinivasan, Nominee Director and CMD of New from being a risk-averse society. To achieve our vision India Assurance Company Limited by integrating social, environmental and health concerns of the Indian society into Corporation’s Shri G. C. Gaylong, Executive Director and General overall CSR policy and programmes. Manager, GIC Re

The thrust of CSR activities is on capacity building, 3. Average Net profit of Company for last three financial empowerment of communities, inclusive socio- years: ` 2864.46 crore economic growth, environment protection, promotion of green and energy efficient 4. Prescribed CSR expenditure (2% of the amount in technologies, development of backward regions, and item): ` 57.29 crore up-liftment of the marginalized and under-privileged 5. Details of CSR spent during financial year - sections of the society. a) Total Amount spent in FY: ` 48,91,14,071.00 b) Amount Unspent: ` 8,37,85,929.00 c) Manner in which the amount spent during the financial year in detail:

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead (1) (2) (3) (4) (5) (6) (7) (8) 1. Alibaug Nagar School Alibaug, 2655328.00 2655328.00 0.00 2655328.00 Direct – Parishad Infrastructure Maharshtra Alibaug Nagar Parishad

2. Annamitra Mid day meal Thana , 2475000.00 2475000.00 0.00 2475000.00 Direct- Maharashtra Annamitra

3. Annamitra Mid day meal Jamshedpur, 2475000.00 2475000.00 0.00 2475000.00 Direct- Bihar Annamitra

4. Annamitra Mid day meal Jaipur, 2475000.00 2475000.00 0.00 2475000.00 Direct- Rajasthan Annamitra

5. Annamitra Mid day meal Ujjain, 2475000.00 2475000.00 0.00 2475000.00 Direct- Madhya Annamitra Pradesh

6. Annamitra Mid day meal Kolkata, 2475000.00 2475000.00 0.00 2475000.00 Direct- West Bengal Annamitra

ANNUAL REPORT 2015-2016 23 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead 7. Annamitra Mid day meal Pune, 2475000.00 2475000.00 0.00 2475000.00 Direct- Maharashtra Annamitra

8. Annamitra Mid day meal Palghar, 2475000.00 2475000.00 0.00 2475000.00 Direct- Maharashtra Annamitra

9. Akshaypatra Midday meal Hubli, 1462354.00 1462354.00 0.00 1462354.00 Direct - (VAN) Karnataka Akshaypatra

10. Akshaypatra Midday meal Bangalore, 2352750.00 2352750.00 0.00 2352750.00 Direct - Karnataka Akshaypatra

11. Akshaypatra Midday meal Mangalore, 2401500.00 2401500.00 0.00 2401500.00 Direct - Karnataka Akshaypatra

12. Akshaypatra Midday meal Puri, Orissa 2489250.00 2489250.00 0.00 2489250.00 Direct - Akshaypatra

13. Akshaypatra Midday meal Bhubhaneshwar, 2492250.00 2492250.00 0.00 2492250.00 Direct - Orissa Akshaypatra

14. Akshaypatra Midday meal Hyderabad, 2477250.00 2477250.00 0.00 2477250.00 Direct - Andhra Akshaypatra Pradesh

15. Akshaypatra Midday meal Bellary, 2491500.00 2491500.00 0.00 2491500.00 Direct - Karnataka Akshaypatra

16. Akshaypatra Midday meal Bellary, 1886066.00 1886066.00 0.00 1886066.00 Direct - (VAN) Karnataka Akshaypatra

17. BMVSS, Livelihood Mumbai, 500000.00 345091.00 0.00 345091.00 Direct - BMVSS Mumbai generation Maharashtra Mumbai

18. BMVSS, Livelihood Buldhana, 2500000.00 1902305.00 0.00 1902305.00 Direct - BMVSS Mumbai generation Maharashtra Mumbai

19. BMVSS Livelihood Surat, 220500.00 146300.00 0.00 146300.00 Direct - BMVSS Ahmedabad generation Gujarat Ahmedabad

20. BMVSS Delhi Livelihood Pan India 2350000.00 2350000.00 0.00 2350000.00 Direct - BMVSS generation Delhi

21. BMVS, Jaipur Livelihood Pan India 2500000.00 2500000.00 0.00 2500000.00 Direct - BMVSS generation Jaipur

24 ANNUAL REPORT 2015-2016 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead 22. BMVS, Jaipur Economic Pan India 1001000.00 1001000.00 0.00 1001000.00 Direct - BMVSS stability Jaipur

23. BMVSS Livelihood Andhra 1560000.00 1560000.00 0.00 1560000.00 Direct - BMVSS Hyderabad generation Pradesh Hyderabad

24. BMVSS Rehabilitation Jalna, 2497000.00 1642784.00 0.00 1642784.00 Direct - BMVSS Mumbai Maharashtra Mumbai

25. BMVSS Livelihood Bangalore, 2500000.00 2500000.00 0.00 2500000.00 Direct - BMVSS Bangalore generation Karnataka Bangalore

26. BNGVN Livelihood Jalgaon, 2262500.00 2262500.00 0.00 2262500.00 Direct - BNGVN generation Maharashtra

27. Concern India Health & Mumbai, 984116.00 984116.00 0.00 984116.00 Direct- CIF Foundation Hygiene Maharashtra

28. Concern India Infrastructure Mumbai, 805000.00 805000.00 0.00 805000.00 Direct- CIF Foundation Maharashtra

29. Cancer Health- Pan India 2400000.00 2400000.00 0.00 2400000.00 Direct- CPAA Patients Aids Adoption of Association cancer patients

30. Cancer Health- Mumbai, 1377600.00 1377600.00 0.00 1377600.00 Direct- CPAA Patients Aids Biochemistry Maharashtra Association Machine

31. Cancer Health- Silvassa, 350000.00 350000.00 0.00 350000.00 Direct- CPAA Patients Aids Screening Dadra & Association camp Nagar Haveli

32. Cancer Health- Imphal, Patients Aids Screening Manipur 854000.00 854000.00 0.00 854000.00 Direct- CPAA Association camp

33. Cancer Health- Belgaum, Patients Aids Screening Karnataka 785000.00 785000.00 0.00 785000.00 Direct- CPAA Association camp

34. Chathradhari Education Mumbai, 25500.00 25500.00 0.00 25500.00 Direct- Caterers Maharashtra Chathradhari Caterers

ANNUAL REPORT 2015-2016 25 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead 35. DRDA Serchip, Infrastructure, Chhiahtlang, 2500000.00 2500000.00 0.00 2500000.00 Direct - DRDA Mizoram Health Mizoram Empowerment

36. DRDA Infrastructure, Kawalailung, 2500000.00 2500000.00 0.00 2500000.00 Direct - DRDA Serchhip, Health Mizoram Mizoram Empowerment

37. DRDA, Livelihood Bunsang, 1250000.00 1250000.00 0.00 1250000.00 DIRECT - DRDA Bunsang, generation Nagaland Nagaland

38. DRDA, Livelihood Secuma, 1250000.00 1250000.00 0.00 1250000.00 DIRECT - DRDA Secuma, generation Nagaland Nagaland

39. Dhanas Gram Hygiene and Dhanas, 1250000.00 1250000.00 0.00 1250000.00 DIRECT - Panchayat, Sanitation Chandigarh Dhanas Gram Chandigarh Panchayat

40. DRDA, Infrastructure Mandi, 1250000.00 1250000.00 0.00 1250000.00 DIRECT - DRDA Himachal Himachal Pradesh Pradesh

41. Helpers of Livelihood Sawantwadi, 2100000.00 2100000.00 0.00 2100000.00 Direct - HHK Handicap generation Maharashtra

42. Helpers of Infrastructure Sawantwadi, 2500000.00 2500000.00 0.00 2500000.00 Direct - HHK Handicap Maharashtra

43. Helpers of Infrastructure Kolhapur, 1250000.00 1250000.00 0.00 1250000.00 Direct - HHK Handicap Maharashtra

44. Insurance Education Mumbai, Institute of Maharashtra 75000.00 75000.00 0.00 75000.00 Direct -III India

45. Kagal Nagar Hygiene & Kagal, 3000000.00 3000000.00 0.00 3000000.00 Direct- Kagal Parishad (VA) Sanitation Maharashtra Nagar Parishad

46. MITTRA Filtration Water Shiroshi, 2644440.00 2644440.00 0.00 2644440.00 Direct- MITTRA intervention Palghar School Maharashtra Infrastructure

26 ANNUAL REPORT 2015-2016 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead 47. MITTRA Filtration Water Talyachapada 2617500.00 2617500.00 0.00 2617500.00 Direct- MITTRA intervention Palghar, School Maharashtra Infrastructure

48. MITTRA Health Dhumodi, 2129400.00 2129400.00 0.00 2129400.00 Direct- MITTRA Infrastructure Nashik, Maharashtra

49. MITTRA Health Sapte, 2198400.00 2198400.00 0.00 2198400.00 Direct- MITTRA Infrastructure Nashik, Maharashtra

50. Mawlynbgna, Infrastructure Mawlynbgna, 1250000.00 1250000.00 0.00 1250000.00 Direct – Meghalaya Green Meghalaya Directorate of Initiatives Meghalaya

51. Mumbai Health Mumbai, 2369400.00 2369400.00 0.00 2369400.00 Direct- MMC Mobile Creche Maharashtra

52. Matoshree Power saving Thane, 1600000.00 1600000.00 0.00 1600000.00 Direct – Vrudhhashram Maharashtra Matoshree Vrudhhashram

53. NARMADA Education Lepa, 2287500.00 1500000.00 0.00 1500000.00 Direct- Madhya NARMADA Pradesh

54. National Infrastructure Mumbai , 1443750.00 1443750.00 0.00 1443750.00 Direct - NAB Association Maharashtra of Blind

55. National Rehabilitation Mumbai 2391000.00 2391000.00 0.00 2391000.00 Direct - NAB Association Thane, of Blind Maharashtra

56. National Rehabilitation Mumbai 2160000.00 2160000.00 0.00 2160000.00 Direct - NAB Association Thane, of Blind Maharashtra

57. National Education Pan India 1200000.00 1200000.00 0.00 1200000.00 Direct - NAB Association of Blind

ANNUAL REPORT 2015-2016 27 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead

58. National Education Mumbai 2300000.00 2300000.00 0.00 2300000.00 Direct - NAB Association Thane, of Blind Maharashtra

59. National Livelihood Mumbai 2400000.00 2400000.00 0.00 2400000.00 Direct - NAB Association generation Thane, of Blind Maharashtra

60. National Education Mount Abu, 2000020.00 2000020.00 0.00 2000020.00 Direct- NAB Association Rajasthan of Blind

61. NIA Education Pune, 1930000.00 1930000.00 0.00 1930000.00 Direct - NIA Scholarships Maharashtra

62. Nezabhari Health, Nezabhari, 2885122.00 2811100.00 0.00 2811100.00 Direct - Initiatives Hygiene, Uttar Sunil Kumar Infrastructure Pradesh Dixit, Vijay Shree Hospital

63. Namami Hygiene & Pan India 150000000.00 150000000.00 0.00 150000000.00 Direct Ganga Sanitation

64. PRADAN Livelihood Purulia, 2500000.00 2500000.00 0.00 2500000.00 Direct- generation West Bengal PRADAN

65. Phayeng - Infrastructure, Phayeng, 2500000.00 2500000.00 0.00 2500000.00 Direct - Manipur Health Manipur Phayeng GP Empowerment

66. Raipur Kalan Infrastructure Raipur Kalan, 1250000.00 1250000.00 0.00 1250000.00 Direct – Raipur Gram Chandigarh Kalan Gram Panchayat, Panchayat Chandigarh

67. Rural Health Anantpur, 2971987.00 2971987.00 0.00 2971987.00 Direct - RDT Development Andhra Trust Pradesh

68. Rural Infrastructure Anantpur, 2257500.00 2257500.00 0.00 2257500.00 Direct - RDT Development Andhra Trust Pradesh

69. Rural Bio Gas Anantpur, 2130300.00 2130300.00 0.00 2130300.00 Direct - RDT Development Andhra Trust Pradesh

28 ANNUAL REPORT 2015-2016 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead 70. Rotary Club Infrastructure Ambala, 2500000.00 2500000.00 0.00 2500000.00 Direct- Rotary of Ambala Punjab Club of Ambala

71. Swachch Hygiene & Pan India 150000000.00 150000000.00 0.00 150000000.00 Direct Vidyalaya Sanitation

72. Salutory Health- Imphal 157108.00 156068.00 0.00 156068.00 Direct - SSS Service Society Screening Manipur camp

73. Su Samannya Health Howrah, 2087473.00 2087473.00 0.00 2087473.00 Direct- Su West Bengal Samannya

74. SCITECH Health Pune, 40950.00 40950.00 0.00 40950.00 Direct- Maharashtra SCITECH

75. Sankalpataru Plantation Barmer, 1223335.00 1223335.00 0.00 1223335.00 Direct - Rajasthan Sankalptaru

76. Samaritan Education & Howrah, 2450000.00 2450000.00 0.00 2450000.00 Direct - SHM Help Mission infrastructure West Bengal

77. Shirur NAGAR Hygiene & Pune, 785903.00 785903.00 0.00 785903.00 Direct- Shirur Parishad Sanitation Maharashtra Nagar Parishad

78. SUADHA Education Thana, 2395954.00 2395954.00 0.00 2395954.00 Direct - Maharashtra SUADHA

79. SUADHA Health Thane, 100000.00 100000.00 0.00 100000.00 Direct - Maharashtra SUADHA

80. SUADHA Health Thane, 1082270.00 1082270.00 0.00 1082270.00 Direct - Maharashtra SUADHA

81. Sapphire Education Mumbai, 76782.00 76782.00 0.00 76782.00 Direct – Maharashtra Sapphire

82. SULABH Hygiene & Mumbai, 7092799.00 7092799.00 0.00 7092799.00 Direct-Mulund Sanitation Maharashtra

83. Tamil Nadu Rehabilitation Tamil Nadu 30000000.00 30000000.00 0.00 30000000.00 Direct Flood Relief

ANNUAL REPORT 2015-2016 29 CSR Report - Annexure-I

Sr. CSR project Sector in which Projects/ Amount Amount spent on the Cumulative Amount spent: No. identified the project is programmes outlay (`) Projects or expenditure Direct or covered Local area Programmes (`)(`) through State/district Implementing Agency (`) Direct Overhead 84. Thanga Infrastructure, Thanga 2500000.00 2500000.00 0.00 2500000.00 Direct – Part II – Health Part II, Thanga Manipur Empowerment Manipur Part II- GP

85. Umred Nagar Infrastructure Umred, 2500000.00 2500000.00 0.00 2500000.00 Direct – Umred Parishad (VA) Hygiene & Maharashtra Nagar Parishad Sanitation

86. Vengurla Hygiene & Vengurla, 4818296.00 4818296.00 0.00 4818296.00 Direct – Nagar Sanitation Maharashtra Vengurla Parishad (VA) Nagar Parishad

Total 49,16,57,653.00 48,91,14,071.00 48,91,14,071.00 6. Reasons for the unspent amount. Some of the proposals received were not compliant with our CSR thrust areas.

7. Responsibility Statement of the CSR Committee: The CSR Committee affirms that the implementation and monitoring of CSR activities is in compliance with the CSR Policy and objectives of the Corporation.

Smt. Alice G Vaidyan (Chairman-cum-Managing Director) (Chairman CSR Committee)

30 ANNUAL REPORT 2015-2016 Secreterial Audit Report - Annexure-II

Form No. MR-3 (iv) Foreign Exchange Management Act, 1999 and the SECRETARIAL AUDIT REPORT rules and regulations made thereunder to the extent FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016 of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings2; [Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and (v) The following Regulations and Guidelines prescribed Remuneration of Managerial Personnel) Rules, 2014] under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)3:- The Members, General Insurance Corporation of India (a) The Securities and Exchange Board of India ‘SURAKSHA’ 170, J Tata Road (Substantial Acquisition of Shares and Churchgate Takeovers) Regulations, 2011; Mumbai- 400020 (b) The Securities and Exchange Board of India We have conducted the secretarial audit of the (Prohibition of Insider Trading) Regulations, compliance of applicable statutory provisions and the 1992; adherence to good corporate practices by General (c) The Securities and Exchange Board of India Insurance Corporation of India (hereinafter called “the (Issue of Capital and Disclosure Requirements) Company”). Secretarial Audit was conducted in a manner Regulations, 2009; that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and (d) The Securities and Exchange Board of India expressing our opinion thereon. (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other (e) The Securities and Exchange Board of India records maintained by the Company and also the (Issue and Listing of Debt Securities) information provided by the Company, its officers, agents Regulations, 2008; and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, (f) The Securities and Exchange Board of India the Company has, during the audit period covering the (Registrars to an Issue and Share Transfer financial year ended on March 31, 2016, complied with Agents) Regulations, 1993 regarding the the statutory provisions listed hereunder and also that Companies Act and dealing with client; the Company has proper Board-processes and compliance-mechanism in place to the extent, in the (g) The Securities and Exchange Board of India manner and subject to the reporting made hereinafter. (Delisting of Equity Shares) Regulations, 2009;

We have examined the books, papers, minute books, (h) The Securities and Exchange Board of India forms and returns filed and other records maintained (Buyback of Securities) Regulations, 1998; and by the Company for the financial year ended on March 31, 2016 according to the provisions of: (vi) Other applicable laws namely Industrial & Labour Laws, Commercial laws, Business related Laws, (i) The Companies Act, 2013 (the Act) and the rules Commercial Laws as detailed in Annexure B made thereunder; We have also examined compliance with the applicable (ii) The Securities Contracts (Regulation) Act, 1956 clauses of the following: (‘SCRA’) and the rules made thereunder; (i) Secretarial Standards issued by The Institute of (iii) The Depositories Act, 1996 and the Regulations and Company Secretaries of India. Bye-laws framed there under1;

ANNUAL REPORT 2015-2016 31 Secreterial Audit Report - Annexure-II

(ii) The Listing Agreements entered into by the We further report that there are adequate systems and Company with Stock Exchange(s)4. processes in the Company commensurate with the size and operations of the Company to monitor and ensure During the period under review the Company has compliance with applicable laws, rules, regulations and complied with the provisions of the Act, Rules, guidelines. Regulations, Guidelines, Standards, etc. mentioned above. No audit has been conducted on the compliance with finance and taxation laws as the same are subject to audit We further report that the Board of Directors of the by the Statutory Auditor and Internal Auditor to the Company is duly constituted with proper balance of Company and their observations, if any, shall hold good Executive Directors, Non-Executive Directors and for the purpose of this audit report. Independent Directors. The changes in the composition of the Board of Directors that took place during the We further report that during the audit period the period under review were carried out in compliance with Company has (i) been converted to ‘Public Limited’ and the provisions of the Act. (ii) Split the equity shares of face value ` 100/- each into those of face value ` 1/- each. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda June 21, 2016 CS. Suresh Viswanathan were sent at least seven days in advance, and a system Mumbai Designated Partner exists for seeking and obtaining further information and FCS : 4453 clarifications on the agenda items before the meeting CP No : 11745 and for meaningful participation at the meeting. Note: This report is to be read with our letter of even Majority decision is carried through while the dissenting date which is annexed as Annexure A and forms and members’ views are captured and recorded as part of integral part of this report. the minutes5.

1The shares of the Company have not been dematerialised and hence the Depositories Act is not applicable 2Not applicable to the Company during the Audit period 3SEBI Act and the Regulations made thereunder are not applicable since (i) the Company is not a SEBI Registered market intermediary and also (ii) the shares of the Company are not listed in any Stock Exchange during the Audit Period 4Not applicable to the Company during the Audit period 5All resolutions were carried unanimously

32 ANNUAL REPORT 2015-2016 Secreterial Audit Report - Annexure-II

ANNEXURE A ANNEXURE B

The Members, A. INSURANCE RELATED LAWS, RULES AND General Insurance Corporation of India REGULATIONS ‘SURAKSHA’ 170, J Tata Road Churchgate No. Governing Act/Rules/Regulation/Circulars/ Mumbai- 400020 Notifications, etc.

Our report of even date is to be read along with this 1. Insurance Act, 1938 letter. 2. IRDA (Insurance Advertisements and Disclosure) 1. Maintenance of secretarial record is the Regulations, 2000 responsibility of the management of the Company. 3. IRDA (Appointed Actuary) Regulations, 2000 Our responsibility is to express an opinion on these secretarial records based on our audit. 4. IRDA (Actuarial Report and Abstract ) Regulations, 2000 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance 5. IRDA (Investment) (Fifth Amendment) Regulations, about the correctness of the contents of the 2013 Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in 6. Corporate Governance Guidelines for Insurance secretarial records. We believe that the processes and Companies issued by IRDA in case of Insurance practices, we followed provide a reasonable basis for Companies. our opinion. 7. IRDA (General Insurance-Reinsurance) 3. We have not verified the correctness and Regulations, 2013 appropriateness of financial records and Books of Accounts of the Company. 8. IRDA (Life Insurance-Reinsurance) Regulations, 2013 4. Where ever required, we have obtained the Management representation about the compliance 9. IRDA (Assets, Liabilities and Solvency Margin of of laws, rules and regulations and happening of Insurers) Regulations, 2000 events etc. 10. The IRDA (Preparation of Financial Statements And 5. The compliance of the provisions of Corporate and Auditor’s Report of Insurance Companies) other applicable laws rules, regulations the Regulations, 2000 responsibility of management, our examination was limited to the verification of procedures on test basis. 11. IRDA (Qualification of Actuary) Regulations, 2004

6. The Secretarial Audit report is neither an assurance 12. IRDA (Assets, Liabilities and solvency Margin of as to the future viability of the Company nor of the Insurers) Regulations, 2000 efficacy or effectiveness with which the management has conducted the affairs of the 13. IRDA (Places of Business) Regulations 2015 Company. B. OTHER LAWS APPPLICABLE TO THE COMPANY June 21, 2016 CS. Suresh Viswanathan 1. Right to Information Act, 2005 Mumbai Designated Partner FCS : 4453 CP No : 11745

ANNUAL REPORT 2015-2016 33 Extract of Annual Return - Annexure-III

Annexure- III Form No. MGT-9 EXTRACT OF ANNUAL RETURN As on the financial year ended on 31st March 2016

[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN: U67200MH1972GOI016133

ii) Registration Date: 22nd November, 1972

iii) Name of the Company: GENERAL INSURANCE CORPORATION OF INDIA

iv) Category/Sub-Category of the Company: Public Company.

v) Address of the registered office and contact details: “Suraksha”, 170, J. Tata Road, Churchgate, Mumbai - 400 020

vi) Whether listed company Yes/No: No

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any: Not Applicable

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- Sl. No. Name and Description of NIC Code of the % to total turnover main products/services Product/service of the company 1 Reinsurance 6520 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sl. NAME AND ADDRESS CIN/GLN HOLDING/ % of shares Applicable No. OF THE COMPANY SUBSIDIARY/ held Section ASSOCIATE

1 India International Ins. ASSOCIATE 20% Section 2(6) of Pte Ltd Companies 64 Cecil Street # 04 - # 05 Act, 2013 IOB Building Singapore 049711

2 GIC Bhutan Re Ltd Post Box No 1679, Near ASSOCIATE 26% Section 2(6) of Thimphu Thromde Office, Companies Thimphu, BHUTAN Act, 2013

3 Agriculture Insurance CIN: ASSOCIATE 35% Section 2(6) of Company India Ltd U74999DL2002PLC Companies 13th Floor, Ambadeep Building, 118123 Act, 2013 14, Kasturba Gandhi Marg, New Delhi - 110 001, INDIA

34 ANNUAL REPORT 2015-2016 Extract of Annual Return - Annexure-III

Sl. NAME AND ADDRESS CIN/GLN HOLDING/ % of shares Applicable No. OF THE COMPANY SUBSIDIARY/ held Section ASSOCIATE

4 GIC Re South Africa Ltd SUBSIDIARY 100% Section 2(87) 15 Eton Road Park Town of Companies Johannesburg 2193 South Africa Act, 2013

5 GIC RE India Corporate SUBSIDIARY 100% Section 2(87) Member Limited, UK of Companies Leadenhall Insurance Act, 2013 Consultants Ltd, Suite 835, At Lloyd’s, One Lime Street, London, England, EC3M 7DQ

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

The face value of Equity Shares of the Corporation has been reduced from ` 100/- to ` 1/- per share vide special resolution passed at the Extra Ordinary General Meeting held on 04.02.2016.

Therefore all shares at the beginning of the year has a face value of ` 100/- and at the end of the year ` 1/- i. Category-wise Share Holding

Category of No. of Shares held at the No. of Shares held at the % Change Shareholders beginning of the year end of the year during the year Physical Total % of Total Physical Total % of Total Shares Shares A. Promoters 1) Indian a) Individual 0 0 0 0 0 0 0 b) Central Govt. 43000000 43000000 100% 4300000000* 4300000000 100% 0% c) State Govt. 0 0 0 0 0 0 0 d) Bodies Corp. 0 0 0 0 0 0 0 e) Banks/FI 0 0 0 0 0 0 0 g) Any Other… 0 0 0 0 0 0 0 Sub-total (A) (1):- 43000000 43000000 100% 4300000000 4300000000 100% 0 2) Foreign a) NRIs - Individuals 0 0 0 0 0 0 0 b) Other - Individuals 0 0 0 0 0 0 0 c) Bodies Corp. 0 0 0 0 0 0 0 d) Banks/FI 0 0 0 0 0 0 0 e) Any Other…. 0 0 0 0 0 0 0 Total (A) (2) Shareholding of 43000000 43000000 100% 4300000000 4300000000 100% 0 Promoter (A) = (A)(1)+(A)(2)

ANNUAL REPORT 2015-2016 35 Extract of Annual Return - Annexure-III

Category of No. of Shares held at the No. of Shares held at the % Change Shareholders beginning of the year end of the year during the year Physical Total % of Total Physical Total % of Total Shares Shares B. Public Shareholding 1. Institutions a) Mutual Funds 0 0 0 0 0 0 0 b) Banks/FI 0 0 0 0 0 0 0 c) Central Govt 0 0 0 0 0 0 0 d) State Govt(s) 0 0 0 0 0 0 0 e) Venture Capital Funds 0 0 0 0 0 0 0 f) Insurance Companies 0 0 0 0 0 0 0 g) FIIs 0 0 0 0 0 0 0 h) Foreign Venture 0 0 0 0 0 0 0 Sub-total (B)(1):- 0000000 2. Non-Institutions a) Bodies Corp. i) Indian 0 0 0 0 0 0 0 ii) Overseas 0 0 0 0 0 0 0 b) Individuals i) Individual shareholders 0 0 0 0 0 0 0 holding nominal share capital upto ` 1 lakh ii) Individual 0 0 0 0 0 0 0 shareholders holding nominal share capital in excess of ` 1 lakh 0 0 0 0 0 0 0 c) Others (specify) 0 0 0 0 0 0 0 Sub-total (B)(2):- Total Public Shareholding (B)=(B)(1)+(B)(2) 0000000 C. Shares held by Custodian for GDRs & ADRs Grand Total (A+B+C) 43000000 43000000 100% 4300000000 4300000000 100% 0%

36 ANNUAL REPORT 2015-2016 Extract of Annual Return - Annexure-III

ii) Shareholding of Promoters

Sl Shareholder’s Shareholding Shareholding at the end % change in No. Name at the beginning of the year of the year shareholding No. of % of total % of Shares No. of % of total % of Shares during the Shares Shares of Pledged/ Shares Shares of Pledged/ year the encumbered the encumbered company to total shares company to total shares 1 President of India 43000000 100% 0 % 4300000000 100% 0 % 0 % Total 43000000 100% 0 % 4300000000 100% 0 % 0 % (iii)Change in Promoters’ Shareholding (please specify, if there is no change)

Sl. Shareholding at the Cumulative Shareholding No. beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 43000000 100% 43000000 100% 2 Date wise Increase/Decrease in The face value of No change The face value of No change Promoters Shareholding during Equity Shares has Equity Shares has the year specifying the reasons been sub divided been sub divided for increase/decrease into ` 1/- per share. into ` 1/- per share. (e.g. allotment/transfer/bonus/ sweat Equity etc.) 3 At the End of the year 4300000000 100% 4300000000 100% (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): NA

Sl. For Each of the Top 10 Shareholding at the beginning Cumulative Shareholding No. Shareholders of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year NA NA 2 Date wise Increase/Decrease in Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/ bonus/sweat equity etc) NA NA 3 At the End of the year (or on the date of separation, if separated during the year) NA NA

ANNUAL REPORT 2015-2016 37 Extract of Annual Return - Annexure-III

(v) Shareholding of Directors and Key Managerial Personnel Shareholding of Mr. Ashok Kumar Roy (Chairman and Managing Director) (On behalf of President of India) Ceased as CMD w.e.f. 31.07.2015 Sl For Each of the Directors Shareholding at the Cumulative Shareholding No. and KMP beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 4 0.0000093 4 0.0000093 2 Date wise Increase/Decrease 4 0.0000093 4 0.0000093 in Shareholding during the (2 Shares transferred year specifying the reasons to Shri G C Gaylong for increase/decrease on 22.06.2015 (e.g. allotment/transfer/ and 2 shares bonus/sweat equity etc) transferred to Shri K. Sanath Kumar on 30.11.2015) 3 At the End of the year 0 0 0 0 Shareholding of Mrs. Snehlata Shrivastava (Government Nominee Director) (On behalf of President of India) Sl For Each of the Directors Shareholding at the Cumulative Shareholding No. and KMP beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 4 0.0000093 4 0.0000093 2 Date wise Increase/Decrease No Change No Change No Change No Change in Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/ bonus/sweat equity etc) 3 At the End of the year 400 0.0000093 400 0.0000093 Shareholding of Mr. Gopalan Srinivasan (Director)* (On behalf of President of India) *Ceased as Director w.e.f. 30.03.16 Sl For Each of the Directors Shareholding at the Cumulative Shareholding No. and KMP beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 4 0.0000093 4 0.0000093 2 Date wise Increase/Decrease 4 0.0000093 4 0.0000093 in Shareholding during the (Shares received year specifying the reasons from Shri Sushobhan for increase/decrease Sarker on (e.g. allotment/transfer/ 16th July, 2014) bonus/sweat equity etc.) 3 At the End of the year 400 0.0000093 400 0.0000093

38 ANNUAL REPORT 2015-2016 Extract of Annual Return - Annexure-III

Shareholding of Mr. K Sanath Kumar (Executive Director)* (On behalf of President of India) *Appointed as Acting CMD w.e.f. 31.07.2015 and Ceased w.e.f. 18.02.2016 Sl For Each of the Directors Shareholding at the Cumulative Shareholding No. and KMP beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 0 0 0 0 2 Date wise Increase/Decrease 2 0.0000043 2 0.0000043 in Shareholding during the (Shares transferred year specifying the reasons from Shri A K Roy for increase/decrease on 30.11.2015) (e.g. allotment/transfer/ bonus/sweat equity etc) 3 At the End of the year 200 0.0000043 200 0.0000043 Shareholding of Mrs. Alice G Vaidyan (Chairman Cum Managing Director)* (On behalf of President of India) *Appointed as CMD w.e.f. 23.01.2016 Sl For Each of the Directors Shareholding at the Cumulative Shareholding No. and KMP beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 0 0 0 0 2 Date wise Increase/Decrease 2 0.0000043 2 0.0000043 in Shareholding during the (Shares transferred year specifying the reasons from Shri Gopalan for increase/decrease Srinivasan on (e.g. allotment/transfer/ 22.06.2015) bonus/sweat equity etc) 3 At the End of the year 200 0.0000043 200 0.0000043

ANNUAL REPORT 2015-2016 39 Extract of Annual Return - Annexure-III

Shareholding of Mr. Gulab Chand Gaylong (Director)* (On behalf of President of India) *Appointed as Director w.e.f. 27.01.2016 Sl For Each of the Directors Shareholding at the Cumulative Shareholding No. and KMP beginning of the year during the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1 At the beginning of the year 0 0 0 0 2 Date wise Increase/Decrease 2 0.0000043 2 0.0000043 in Shareholding during the (Shares transferred year specifying the reasons from Shri A K Roy for increase/decrease on 22.06.2015) (e.g. allotment/transfer/ bonus/sweat equity etc) 3 At the End of the year 200 0.0000043 200 0.0000043

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans Unsecured Loans Deposits Total excluding deposits Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount. 0 0 0 0 ii) Interest due but 0 0 0 0 not paid. iii) Interest accrued 0 0 0 0 but not due. Total (i+ii+iii) 0000 Change in Indebtedness during the financial year  Addition 0 0 0 0  Reduction 0 0 0 0 Net Change 0000 Indebtedness at the end of the financial year i) Principal Amount 0 0 0 0 ii) Interest due but 0 0 0 0 not paid iii) Interest accrued 0 0 0 0 but not due Total (i+ii+iii) 0000

40 ANNUAL REPORT 2015-2016 Extract of Annual Return - Annexure-III

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Amount in `) Sl. Particulars of Name of Name of Name of Name of Total No. Remuneration MD/WTD/ MD/WTD/ MD/WTD/ MD/WTD/ Amount Manager Manager Manager Manager Shri A K Roy Shri K Sanath Smt. Alice G Shri G C (Ceased as CMD Kumar Vaidyan Gaylong w.e.f. (Appointed (Appointed (Appointed 31.07.2015) as Acting CMD as CMD w.e.f. as Director w.e.f. 31.07.2015 23.01.2016) w.e.f. and ceased as 27.01.2016) director w.e.f. 18.02.2016) 1 Gross salary a) Salary as per provisions 7,20,000.00 11,74,268.00 16,10,681.00 3,57,911.00 38,62,860.00 contained in section 17(1) of the Income-tax Act, 1961 b) Value of perquisites u/s 2,37,974.000 57,767.000 3,600.000 21,709.000 3,21,050.000 17(2) Income-tax Act, 1961 c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 2 Stock Option 0 0 0 0 0 3 Sweat Equity 0 0 0 0 0 4 Commission - as % of profit - others, specify 0 0 0 0 0 5 Others, please specify 0 0 0 0 0 Total (A) 9,57,974.00 12,32,035.00 16,14,281.00 3,79,620.00 41,83,910.00 Ceiling as per the Act Not Applicable

ANNUAL REPORT 2015-2016 41 Extract of Annual Return - Annexure-III

B. Remuneration to other directors (Amount in `) Sl. Particulars of Name of Directors no Remuneration Smt. Snehlata Shri Arun Shri G. Shri D.R. Shrivastava Tiwari Srinivasan Mohnot* 1 3. Independent Directors  Fee for attending board/ committee meetings 0 0 0 90,000.00  Commission 0 0 0 0  Others, please specify 0 0 0 0 Total (1) 0 0 0 90,000.00 4. Other Non-Executive Directors  Fee for attending board/ 0 0 0 0 committee meetings  Commission 0 0 0 0  Others, please specify 0 0 0 0 Total (2) 0 0 0 0 Total (B)=(1+2) 0 0 0 90,000.00 Total Managerial Remuneration 0 0 0 90,000.00 Overall Ceiling as per the Act Not Applicable *Ceased to be Director w.e.f. 03.01.2016 C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (Amount in `) Sl. Particulars of Key Managerial Personnel No. Remuneration CEO Company Secretary CFO Total 1 Gross salary (a) Salary as per provisions 35,04,949.00 23,12,074.00 21,17,863.00 79,34,886.00 contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 2,99,341.00 1,31,594.00 95,655.00 5,26,590.00 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary 0 0 0 0 under section 17(3) Income-tax Act, 1961 2 Stock Option 0 0 0 0 3 Sweat Equity 0 0 0 0 4 Commission - as % of profit - others, specify 0 0 0 0 5 Others, please specify 0 0 0 0 Total 38,04,290.00 24,43,668.00 22,13,518.00 84,61,476.00

42 ANNUAL REPORT 2015-2016 Extract of Annual Return - Annexure-III

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: Type Section of the Brief Details of Authority Appeal made, Companies Description Penalty/ [RD/NCLT/ if any Act Punishment/ COURT] (give Details) Compounding fees imposed A. COMPANY Penalty 0 0 0 0 0 Punishment 0 0 0 0 0 Compounding 0 0 0 0 0 B. DIRECTORS Penalty 0 0 0 0 0 Punishment 0 0 0 0 0 Compounding 0 0 0 0 0 C. OTHER OFFICERS IN DEFAULT Penalty 0 0 0 0 0 Punishment 0 0 0 0 0 Compounding 0 0 0 0 0

ANNUAL REPORT 2015-2016 43 Corporate Governance Report

Corporate governance refers to the system of structures,  It provides a conducive environment for developing rights, duties, and obligations by which corporations are a corporate culture that recognizes and rewards directed and controlled. Governance provides the adherence to ethical standards structure through which corporations set and pursue their objectives, while reflecting the context of the social, Changes in the Composition of the Board during the regulatory and market environment. GIC Re strongly year: believes in good corporate governance and aims at Shri A.K. Roy, Chairman-cum-Managing Director ceased being a good corporate citizen. It recognizes the to be a Director on the Board of the Corporation w.e.f. significance of effective corporate governance in 31.07.2015. achieving the trust and confidence of cedents, intermediaries, regulator and other stake holders. Shri K. Sanath Kumar, General Manager was appointed GIC Re is a fully corporate governance compliant as Acting Chairman-cum-Managing Director of the Company. Corporation follows Guidelines by IRDAI and Corporation w.e.f. 31.07.2015. other regulatory bodies regarding corporate governance Shri Doulat Raj Mohnot ceased to be a Director on the regulatory framework which has put in place discussed Board of the Corporation w.e.f. 03.01.2016. as follows: Smt. Alice G. Vaidyan appointed as Chairman-cum- Board of Directors: Managing Director of the Corporation w.e.f 23.01.2016. GIC Re is governed by a Board of Directors under the chairmanship of Chairman-cum-Managing Director. Shri G.C. Gaylong, General Manager of the Corporation The Board of GIC Re has four directors which includes was appointed as Whole Time Director of the one independent director. GIC Re Board has a whole time Corporation w.e.f. 27.01.2016. Chairman. All the directors have executed a deed of Shri K. Sanath Kumar, Acting Chairman-cum-Managing covenant with the Corporation. Director ceased to be a Director on the Board of the  The Board provides overall direction to the business, Corporation w.e.f. 18.02.2016. including projections on the capital requirements, revenue streams, expenses and profitability. Shri G. Srinivasan ceased to be a Director on the Board of the Corporation w.e.f 30.03.2016.  It ensures full compliance with the Insurance Act and the regulations framed there under and other The Directors wish to place on record the co-operation statutory requirements applicable to it; received from Shri A. K. Roy, Shri K Sanath Kumar, Shri G. Srinivasan and Shri Doulat Raj Mohnot, during  It addresses conflicts of interest situations; their tenure as Directors on the Board and also for their valuable contribution to the cause of the General  It ensures fair treatment of ceding companies and Insurance Industry. employees; The Board of Directors as on 31st March 2016 consists of:  It ensures information sharing with and disclosures to stake holders, including investors, ceding 1. Smt. Alice G. Vaidyan Chairman-cum- companies, employees, the regulators, consumers, Managing Director financial analysts and rating agencies. 2. Smt. Snehlata Shrivastava Government Nominee Director  It establishes through whistle blowing mechanism an effective channel for encouraging and facilitating 3. Shri Arun Tiwari Director employees raising concerns or reporting a possible 4. Shri G. C. Gaylong Executive Director breach of law or regulations, with appropriate measures to protect against retaliation against The statement showing the Board Meetings attended reporting employees; a whistle blowing Policy has by the Directors are reflected in the table given below: been put in place.

44 ANNUAL REPORT 2015-2016 Corporate Governance Report

STATEMENT SHOWING NUMBER OF BOARD MEETINGS ATTENDED BY THE DIRECTORS DURING THE PERIOD APRIL 2015 TO MARCH 2016 Name of Directors Date of Meetings 24.04.15 30.05.15 17.07.15 04.09.15 30.11.15 23.12.15 18.02.16 Shri A.K. Roy Present Present Present Ceased * Shri K Sanath Kumar Present** Present Present Present*** Smt. Alice G. Vaidyan Present## Smt. Snehlata Shrivastava Present Present Absent Absent Absent Absent Present Shri. Arun Tiwari Absent Present Present Absent Present Absent Present Shri G. Srinivasan Absent Present Absent Present Present Present Absent Shri D.R. Mohnot Present Present Present Present Absent Present Ceased# Shri G. C. Gaylong Present### (*) Ceased as Director w.e.f. 31.07.15 (#) Ceased as Director w.e.f. 03.01.16 (**) Appointed as Director w.e.f 31.07.15 (##) Appointed as Director w.e.f. 23.01.16 (***) Ceased as Director w.e.f. 18.02.16 (###) Appointed as Director w.e.f. 27.01.16

COMMITTEE OF THE BOARD  The Committee is responsible for the recommendation of the appointment, remuneration, General Insurance Corporation of India has six Board performance and oversight of the work of the level Committees, viz. Audit Committee, Investment auditors (internal/statutory/concurrent). Committee, Corporate Social Responsibility, Enterprise Risk Management, Remuneration and Ethics Committee. The following are the Members of the Audit Committee for the financial year 2015-16. AUDIT COMMITTEE 1. Smt. Snehlata Shrivastava In compliance with Section 177 of the Companies Act, 2. Shri Arun Tiwari 2013, GIC Re has an Audit Committee which is headed by an Independent Director. 3. Shri G. Srinivasan (w.e.f. 24.04.2015 upto 30.03.2016) 4. Shri Doulat Raj Mohnot (upto 03.01.2016)  The Audit Committee oversees the financial statements, and disclosure processes both on an 5. Shri G. C. Gaylong (w.e.f. 18.02.2016) annual and quarterly basis. It sets up procedures and processes to address all concerns relating to adequacy of checks and control mechanisms.

 The Committee oversees the efficient functioning of the internal audit department and review its reports and monitors the progress made in rectification of irregularities and changes in processes wherever deficiencies have come to notice.

ANNUAL REPORT 2015-2016 45 Corporate Governance Report

STATEMENT SHOWING NUMBER OF AUDIT COMMITTEE MEETINGS ATTENDED BY THE MEMBERS DURING THE PERIOD APRIL 2015 TO MARCH 2016 Name of Members Date of Meetings 24.04.15 30.05.15 17.07.15 04.09.15 30.11.15 18.02.16 Smt. Snehlata Shrivastava Present Present Absent Absent Present Present Shri. Arun Tiwari Present* Present Shri G Srinivasan Absent Present Absent Present Present Absent Shri D.R. Mohnot Present Present Present Present Absent Ceased** Shri G C Gaylong Present*** (*)Appointed w.e.f. 17.07.2015 and ceased as committee reconstituted on 19.08.2015 and again appointed w.e.f. 03.02.2016) (**)Ceased as Director w.e.f. 03.01.16 (***) Appointed as Member w.e.f. 18.02.16

INVESTMENT COMMITTEE  The Committee is responsible for a periodic review of the Investment policy based on the performance GIC Re has an Investment Committee consisting of the of investments and the evaluation of dynamic CMD, 2 non-executive Directors, CIO, CFO and Appointed market conditions. Actuary. The members of the Investment committee of the Board  The Committee lays down annual investment policy for the financial year 2015-16 were: and provides oversight to investment operations of the Corporation. 1. Shri A.K. Roy (upto 31.07.2015) 2. Shri K Sanath Kumar (From 04.09.2015 to 18.02.2016)  The policy focuses on a prudential Asset Liability 3. Smt. Snehlata Shrivastava Management (ALM) supported by robust internal control systems. The investment policy and 4. Shri G. Srinivasan (w.e.f. 24.04.2015 upto 30.03.2016) operational framework inter alia, encompass aspects 5. Shri G C Gaylong (w.e.f. 03.02.2016) concerning liquidity for smooth operations, 6. Shri A.K. Garg (upto 18.02.2016) compliance with prudential regulatory norms on 7. Shri N. Mohan (upto 31.05.2015) investments, risk management/mitigation strategies 8. Smt. Alice G. Vaidyan CFO (w.e.f. 13.06.2014 upto to ensure commensurate yield on investments and 04.09.2015) above all protection of policyholders’ funds. 9. Shri V C Jain (w.e.f. 04.09.2015) 10. Shri S Tripathy CIO (w.e.f. 13.08.2015)

46 ANNUAL REPORT 2015-2016 Corporate Governance Report

STATEMENT SHOWING NUMBER OF INVESTMENT COMMITTEE MEETINGS ATTENDED BY THE MEMBERS DURING THE PERIOD APRIL 2015 TO MARCH 2016 Name of Members Date of Meetings 24.04.15 30.05.15 04.09.15 30.11.15 18.02.16 Shri A.K. Roy Present Present Ceased* Shri K. Sanath Kumar Present** Present Present Smt. Snehlata Shrivastava Present Present Absent Present Present Shri G. Srinivasan Absent Present Present Present Absent Shri G.C. Gaylong Present**** Shri N. Mohan Present Present Ceased*** Shri A.K. Garg, Actuary Present Present Present Present Present Smt. Alice G. Vaidyan (CFO) Present Present Present Ceased# Present## Shri V. C. Jain (CFO) Present### Present Shri S. Tripathy (CIO) Present@ Present Present (*) Ceased as Director w.e.f 31.07.15 (**) Appointed as member w.e.f 04.09.15 (***) Ceased as Member w.e.f 31.05.15 (****) Appointed as member w.e.f. 03.02.16 (#) Ceased as CFO w.e.f. 04.09.15(##) Appointed as Director w.e.f. 23.01.16 (###) Appointed as CFO w.e.f. 04.09.15 (@) Appointed as CIO w.e.f. 13.08.15

REMUNERATION COMMITTEE 1. Smt. Snehlata Shrivastava 2. Shri Arun Tiwari (w.e.f. 24.04.2015) The Corporation has a Remuneration Committee of the Board of Directors with the following Members for the 3. Shri G. Srinivasan (w.e.f. 18.02.2016 upto 30.03.2016) financial year 2015-16: 4. Shri Doulat Raj Mohnot (upto 03.01.2016) 5. Shri G. C. Gaylong (w.e.f. 18.02.2016)

STATEMENT SHOWING NUMBER OF REMUNERATION COMMITTEE MEETINGS ATTENDED BY THE MEMBERS DURING THE PERIOD APRIL 2015 TO MARCH 2016

Name of Members Date of Meetings Smt. Snehlata Shrivastava Shri Arun Tiwari Shri G. Srinivasan No Remuneration Committee Meeting held during the period April 2015 to March 2016. Shri Doulat Raj Mohnot Shri G. C. Gaylong

ANNUAL REPORT 2015-2016 47 Corporate Governance Report

ENTERPRISE RISK MANAGEMENT COMMITTEE The Corporation Enterprise Risk Management Committee of the Board consists of the following The Corporation has an Enterprise Risk Management members for the financial year 2015-16. Committee of the Board of Directors and a Risk Management Committee (RMC) of the Management 1. Shri A.K. Roy (upto 31.07.2015) consisting of 1 Director, 2 General Managers and a Chief Risk Officer (CRO). 2. Shri K. Sanath Kumar (w.e.f. 04.09.2015 to 18.02.2016) 3. Smt. Alice G. Vaidyan (w.e.f. 03.02.2016)  The Committee is supervising implementation of Enterprise Risk Management (ERM) framework which 4. Smt. Snehalata Shrivastava is expected to put in place a robust ERM system for effectively and efficiently managing the various risk 5. Shri G. Srinivasan (upto 30.03.2016) exposures; 6. Shri G. C. Gaylong (w.e.f. 03.02.2016)  The Committee assists the Board in effective operation of the risk management system by The members of the Risk Management Committee performing specialized analysis and quality reviews; (Management) are: maintaining a group-wide and aggregated view on Shri G.C. Gaylong, General Manager& Director the risk profile of the insurer in addition to the solo and individual risk profile; Shri B. N. Narasimhan, General Manager

 Report to the Board details on the risk exposures and Shri Pauly Sukumar, General Manager the actions taken to manage the exposures; Smt. Madhulika Bhaskar, Deputy General Manager –  Advice the Board with regard to risk management; Chief Risk Officer decisions in relation to strategic and operational matters such as corporate strategy, mergers and acquisitions and related matters.

STATEMENT SHOWING NUMBER OF ENTERPRISE RISK MANAGEMENT COMMITTEE MEETINGS ATTENDED BY THE MEMBERS DURING THE PERIOD APRIL 2015 TO MARCH 2016 Name of Members Date of Meetings 24.04.15 30.05.15 04.09.15 30.11.15 Shri A.K. Roy Present Present Ceased* Shri K. Sanath Kumar Present** Present Smt. Snehlata Shrivastava Present Present Absent Absent Shri G. Srinivasan Absent Present Present Present (*) Ceased w.e.f. 31.07.15 (**) Appointed as Director w.e.f. 31.07.15

ETHICS COMMITTEE The members of the Ethics Committee (Board) for the financial Year 2015-16 are: GIC Re has put in place a 2-level Ethics Committee of 1. Shri A.K. Roy (upto 31.07.2015) which one is at the management level while the other is at the Board level. The set-up provides a robust support 2. Shri K. Sanath Kumar (w.e.f. 31.07.2015 to 18.02.2016) to the whistle-blowing mechanism where maintenance 3. Smt. Alice G. Vaidyan (w.e.f. 03.02.2016) of confidentiality is of prime importance to provide adequate comfort level to the employees of the 4. Smt. Snehlata Shrivastava Corporation. 5. Shri G. Srinivasan (upto 30.03.2016)

48 ANNUAL REPORT 2015-2016 Corporate Governance Report

The members of the Ethics Committee (Management) GIC Re has formed Board level Committee for Corporate are: Social Responsibility. This committee plays important role to plan, analyze, formulate and execute the CSR 1. Shri G.C. Gaylong, General Manager& Executive policies. GIC Re executes the CSR policies through NGO/ Director Organization which are selected through transparent 2. Shri D. R. Waghela, General Manager evaluation process.

3. Shri B. N. Narasimhan, General Manager The members of the Corporate Social Responsibility Committee for the financial year 2015-16 were: CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE 1. Shri A.K. Roy (upto 31.07.2015)

As per section 135 of Companies Act 2013, Companies 2. Shri K. Sanath Kumar (upto 18.02.2016) fulfilling the criteria about Net Worth, Net Profit, and 3. Smt. Alice G. Vaidyan (w.e.f. 18.02.2016) Turnover have to contribute 2 percent of three years 4. Smt. Snehlata Shrivastava average net profit for Corporate Social Responsibility. 5. Shri Doulat Raj Mohnot (upto 03.01.2016) 6. Shri G. Srinivasan (w.e.f. 03.02.2016 to 30.03.2016) 7. Shri G. C. Gaylong (w.e.f. 03.02.2016)

Name of Members Date of Meetings 24.04.15 04.09.15 30.11.15 Shri A.K. Roy Present Ceased* Shri K. Sanath Kumar Present** Present Smt. Snehlata Shrivastava Present Absent Present Shri D.R. Mohnot Present Present Absent (*) Ceased w.e.f. 31.07.15 (**) Appointed as Member w.e.f. 31.07.15 INDEPENDENT DIRECTORS MEETING:

As per section 149(8) of Companies Act 2013, Corporation has not conducted an Independent Directors Meeting due to only one independent director on the Board of Directors i.e. Mr. Doulat Raj Mohnot and he also ceased to be Director w.e.f. 03.01.2016.

KEY MANAGERIAL PERSONNEL

As per section 2(51) and section 203(1) Companies Act 2013 following are the key managerial personnel of the Corporation.

1. Chairman & Managing Director : Mrs. Alice G. Vaidyan (w.e.f. 23.01.2016) : Mr. K. Sanath Kumar (Acting CMD w.e.f. 31.07.2015-23.01.2016) : Mr. A. K. Roy (upto 31.07.2015) 2. Chief Executive Officer : Mrs. Alice G. Vaidyan (w.e.f. 23.01.2016) : Mr. A. K. Roy (upto 31.07.2015) 3. Company Secretary : Mrs. Suchita Gupta 4. Chief Financial Officer : Mrs. Alice G. Vaidyan (upto 04.09.2015) : Mr. V.C Jain (w.e.f. 04.09.2015)

ANNUAL REPORT 2015-2016 49 Corporate Governance Report

As per IRDA Act 1999, following are the key managerial personnel of the Corporation.

1. Chief Executive Officer : Mr. Alice G. Vaidyan (w.e.f. 23.01.2016) : Mr. A.K. Roy (upto 31.07.2015) 2. Chief Marketing Officer : Mr. G.C. Gaylong 3. Appointed Actuary (General Insurance) : Mr. A.K. Garg (upto 31.03.2016) (Life Insurance) : Mrs. Padmaja R. 4. Chief Investment Officer : Mr. N. Mohan (upto 31.05.2015) : Mr. Satyajit Tripathy (w.e.f. 13.08.2015) 5. Chief of Internal Audit : Mr. G.C. Gaylong 6. Chief Finance Officer : Mrs. Alice G. Vaidyan (upto 04.09.2015) : Mr. V.C Jain (w.e.f. 04.09.2015) 7. Chief Risk Officer : Mrs. Madhulika Bhasker 8. Chief Compliance Officer : Mrs. Suchita Gupta

CERTIFICATE OF COMPLIANCE OF THE CORPORATE GOVERNANCE GUIDELINES

I, Suchita Gupta, hereby certify that the Corporation has complied with the Corporate Governance guidelines for Insurance Companies as amended from time to time and nothing has been concealed or suppressed.

Suchita Gupta Deputy General Manager & Company Secretary

50 ANNUAL REPORT 2015-2016 Corporate Social Responsibility Report

CSR ACTIVITES

1. Adoption of 20 Cancer Patients 4. Health and Sanitation Initiatives through Sulabh International Social Service As a part of our association with CPAA (Cancer Organisation Patient’s Aids Association) we have continued various activities’ with them. A major one being GIC would bear the cost of refurbishing/renovation adoption of cancer patients. of existing Sulabh Toilet Complex, in Mumbai City limits at various locations. We sponsor ` 60,000/- per patient for cancer treatment per year. This amount covers post- M/s Sulabh International Social Service is a surgical rehabilitation, economic support for nonprofit voluntary organisation and the patient and their families; emotional and spiritual Advantages of Sulabh Flush Composting Toilets is counseling and accommodation during treatment. that they are hygienically and technically appropriate and are easy to maintain due to their 2. CPAA Tempo Traveller : pay and use system. Their system of construction also ensures that the ground water does not get A large majority of patients coming to polluted. GIC Re has associated with them in Tata Memorial Hospital & other government renovating the existing toilet blocks in Mumbai at hospitals from all over the country for surgery and the various locations. post surgical treatment like radiotherapy, chemotherapy, etc are offered free transportation 5. Shiroshi and Talyacha pada - Village Adoption services by CPAA. Jawhar is one of the most remote tribal blocks of Free transport is provided to patients Palghar districts. The area is surrounded by the Mokhada, Vikramgad, Dahanu blocks. The area is GIC has donated a 13 seater tempo traveler to CPAA hilly with forest, where natural diversity is observed in forest as well as in crop. 3. Childhood Malnutirtion Control and Prevention Programme in the Govandi While villages in the region receive copious rains Dumping grounds area in Mumbai during the monsoon season, prominent hill ranges, isolated hillocks, undulations in the district allow This initiative is aimed basically for the slum the shallow soil to quickly saturate with water children approx. 4000 (under the age group 1-6 resulting in over owing wells. Further, due to poor years) in the Rafiqnagar slums near Govandi storage and naturally sloping topography, water Dumping Grounds in Mumbai. from these wells and natural aquifers ow rapidly This initiative will help create awareness among into the sea. As a result, the area becomes dry from these dwellers about health, hygiene and November onwards causing tremendous stress on sanitation. Regular medical camps will be villages and their communities. The main source conducted for children. Nutrition powder and of income is rain fed agriculture and crops grown supplements will be provided to them. are paddy, finger millets and other crops. Jawhar consisting 109 revenue villages with total All these programmes will be implemented by population of 1,11,039. One such village is Shiroshi Concern India Foundation along with Niramaya. which is surrounded by Mokhada in East, Vikramgad towards west. Women have to walk

ANNUAL REPORT 2015-2016 51 Corporate Social Responsibility Report

CSR ACTIVITES

miles every day to fetch water from local resources financial year, free medical camps are held for the for drinking as well as for other necessities. They villagers of Nezabhari. The cost of health camps is end up wasting nearly 4 – 5 man hours of their borne by GIC Re. These health camps, have brought productive time which could have been utilized down the spread of communicable diseases. These towards livelihood generating initiatives camps also create awareness on lifestyle diseases like diabetes and hypertension. The villagers are Establishing safe drinking water supply for both now more careful about their eating habits and villages by community participation and creating more conscious about their health. Continuing with awareness on health and hygiene. Before GIC Re the community hall and toilet blocks, this year to initiated programmes there in association with ensure viability of the same programme and to MITRA (Maharashtra institute of Technology for maintain aesthetic value a boundary wall and gate Rural Areas) women of the village spent 4 to 5 hrs has been installed around the same campus. every day to fetch water. It led to physical exertion, “GIC has donated 12 lakhs for these loss of earnings and inability to explore other programmes in Nezabhari livelihood opportunities. This also lead to girls dropping out from the schools to support their 7. BMVSS Jaipur mothers in daily chores and to look after their siblings. BMVSS is registered as a society under the Rajasthan Societies Registration Act on 25th March The programmes initiated here have ensured safe 1975 and is the world‘s largest organisation for the and regular drinking water to the villagers; explore disabled. They are a secular, non-governmental, alternate farming opportunities; setting up of non-political, non-regional institution helping the Kitchen gardens for healthy living and developing physically challenged specially the financially weak infrastructure for a small school. and underprivileged.

Self-help groups have been formed in Shiroshi with The main objective of BMVSS is to provide mobility a corpus collected from most of the families to and dignity to the amputees especially to those manage the running costs of the filtration system who are below poverty line. They provide installed. To promote healthy living and also to amputees and polio patients artificial limbs and ensure ways and means to prevent wastage of other aids and appliances totally free of charge. water MITRA has trained the villagers to set up kitchen gardens. Chilli saplings, mixed vegetable Around 125-150 amputees and polio patients visit seed kit and fruit bearing plants were distributed their premises on any given day. The cost of the to the families. artificial limb is ` 3500/-. But all the services are provided totally free of charge. Besides, all 6. Phase II Nezabhari- Village Adoption beneficiaries, are treated alike. No distinction is made on any basis. They have evolved special As per our village adoption policy, we associate sensitive patient centric management system to with the village for a period of 3 years to ensure deal with large number of beneficiaries who are that the programmes that are imitated in the first poor, neglected, underpriveleged and often phase become sustainable and self-reliant. Last uneducated. The Jaipur foot is the only non year, a community hall and toilet blocks were built articulated foot in the world that provides mobility and 4 hand pumps were installed in Nezabhari. in all 3 planes i.e. Dorsi flexion, Inversion/Eversion Solar lamps were also distributed to needy school and transverse rotation. children. To extend the association in the current

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CSR ACTIVITES

BMVSS provides limbs, aids and appliances, wheel 9. Financial Assistance of ` 3.45 lakh for providing chairs, hand paddled cycles, crtuches, etc to all the Mobile Jaipur foot camp through BMVSS diabled beneficiarries at its centres FREE OF COST. Mumbai branch at Cuffe Parade ON 7th and The Jaipur foot enables amputees to walk, run, trek, 8th September, 2015. awim, sit cross legged, walk on unevern terrain, work in wet muddy fields, etc. As a part of our initiative to provide support GIC Re had sponsored a mobile Jaipur foot camp at GIC Re has This year committed an amount of Cuffe Parade on 7th and 8th September, 2015 The ` 25.00 lakhs. mobile camp was organized for fitment of artificial limbs (Jaipur foot) and calipers for the disabled at 8. Financial Assistance of ` 10.01 lakh for Macchimar Nagar, Captain Prakash Pedhe Marg, providing Economic Aids to the disabled Opp. Badhwar Park, Cuffe Parade, Mumbai. persons through BMVSS. This camp was conducted through Bhagwan Mahavir Viklang Sahayak Samiti (BMVSS- Mumbai As a part of our initiative to provide support to the Branch). About 70 beneficiaries have benefitted physically handicapped, it was felt that after a from this camp. person receives fitment of artificial limbs/or calipers, something should be done to provide The following accessories were distributed to the economic stability to them. beneficiaries i) Limbs 29, ii) Calipers 32, iii) Crutches 8 iv) Walker 2 v) Stick 2 vi) Elbow 7, vii) Wheel chair Hence it was decided to provide economic 9 and viii) Tricycle 6 assistance to the disabled who have already been supported for physical rehabilitation. Under this, Limbs: disabled would be given low cost, quick maturing self-employment so that after getting physically GIC has contributed an amount of ` 3.45 lakhs for rehabilitated they start earning income and this mobile camp. become economically rehabilitated also. This is a concept of comprehensive rehabilitation covering 10. NAB-PROVISION OF BRAILLE KITS both the physical and economic aspects. GIC Re has The National Association of Blind (NAB) is been working in this field along with BMVSS from empanelled with us and their main focus area is the last financial year empowerment of visually impaired persons by way Over 95% of its beneficiaries are below the poverty of education and vocational skill development. line. BMVS is also the implementing agency for the NAB is more than 60 years old was founded in 1952. ADIP Scheme of Government of India in the According to NBA estimate India has a population Ministry of Social Justice & Empowerment. Most of of 1.5 lakhs School going visually impaired children. the beneficiaries are from BPL category and the There are about 300 special schools for the blind underprivileged sections of society. GIC Re has altogether educating about 30,000 visually contributed an amount of ` 10.01 lakhs for this impaired children. There are about 50 voluntary project. organizations in the country operating integrated education programmes, wherein about 10,000

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visually impaired children get education in regular remain undamaged even after 20-25 years. These schools. All these visually impaired children require can be recycled once a book is no longer in syllabus; basic educational devices needed for writing the master plates can be flattened and reused. GIC Braille, arithmetic, geometry, etc. Every blind child Re has contributed an amount of ` 8.25 lakhs must have a braille kit to enable him/her to pursue towards purchase of zinc plates for this purpose. further studies. 12. Sponsoring the Biochemistry machine for CPAA NAB Department of Education for several years has at their Diagnostic center at Naigaon center. been distributing Braille kits free of cost to schools for the blind and implementing agencies in India. The CPAA diagnostic center was started in 1998 The cost of Braille kit ia about ` 1200/-. All school and they conduct pathological tests alongwith going children are given this kit at the radiological investigations to general public. The commencement of their formal education. One kit patients who come to the center are mostly can last for about 4-5 years. With the help of these referred by local doctors especially being situated kits they can study all subjects that a sighted child in the hospital zone like Tata Memorial hospital, can .GIC Re has contributed 1000 braille kits. Wadia Children‘ Hospital and KEM Municipal Hospital. 11. Financial Assistance for providing Stitching Machine and Zinc Plates to National The Naigaon center offers free service to the Association of Blind. layman on every Tuesdays (normally this is done by word of mouth). All cancer policy holders can The Braille Press produces and circulates a wide avail of various health checkups on Wednesdays. range of periodicals, and general books for blind CPAA has been given this space to conduct their individuals & institutions for the blind all over India. activities by BMC in their gynecological ward at All the books produced by the Braille Press are Naigaon. GIC Re has provided them with a bio supplied either free of cost or at one sixth of the chemistry machine costing ` 13.77 lakhs. cost of production. The Braille Press has the capacity to produce about 70,000 braille volumes 13. Contribution to Bhagwan Mahaveer Viklang running into more than one crore pages in a year. Sahayata Samiti, Hyderabad (timeline 6 months GIC Re has provided them with a stitching machine. GIC Re has also tied up with the Hyderabad center By providing them this machine, they save of BMVSS. To contribute funds for all patients who considerable time and labour. Such machine can avail their facility for a period on 6 months starting bind about 500 volumes in 8 hours. GIC Re has 16th October, 2015 to 15th March, 2016. GIC Re has contributed an amount of ` 6.18 lakhs towards contributed ` 15.60 lakhs towards the same. purchase of stitching machine. 14. Contribution to Bhagwan Mahaveer Viklang At present, NAB uses Aluminum plates for printing Sahayata Samiti, Delhi (timeline 2 months) Braille press books, which are required in large CSR department has tied up with their Delhi Center quantities especially Marathi medium school as well at Ahimsa Bhavan, Shankar Road Crossing, textbooks. They use aluminum plates for the New Rajendra Nagar, New Delhi for contribution master copies to be used on the Plate Embossing for funds for patients at their center for two months Machine. The dots on aluminum sheets get worn (starting 2nd November 2015). This contribution out or flatten after some time resulting in poor will help about 650 disabled beneficiaries to regain quality of Braille books. These aluminum sheets their mobility and dignity through fitment and cannot be reused. Zinc plates have a long life and

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provision of Jaipur aids and appliances such as 16. Contribution for an Ultra sound Machine for crutches, wheel chairs and hand paddled tricycles. Rural Development Trust Hospitals at GIC Re has contributed an amount of ` 23.50 Mannanur, Achampet area, Andhra Pradesh. lakhs for this initiative. RDT is an NGO at Anantapur, Rayalaseema Region 15. Contribution for MID-day Meal Scheme of Andhra Pradesh and basically focuses on areas through Annamitra. like Education, Women empowerment, Community Health, including HIV/AIDS, Hospitals, Community The Midday Meal Scheme is a school meal Habitat, Green Initiatives, etc. Achampet and programme of the Government of India designed Srisailam areas comprise of population belonging to improve the nutritional status of school-age to Chenchu tribes and BC communities residing in children nationwide. The programme supplies free deep forest areas where no proper medical facilities lunches on school days for children in Primary and are available. It covers nearly 50 villages in 3 Upper Primary Classes in Government, mandals of Amarabad, Achampet & Lingala. GIC Re Government Aided, Local Body, Education has contributed towards an ultra sound facility at Guarantee Scheme, and Alternate Innovative Mannanur clinic. Contribution of this facility will be Education Centers, Madarsa and Maqtabs useful for the poor tribals, mostly relating to supported under Sarva Shiksha Abhiyan, and women’s pregnancies and child birth issues. National Child Labour Project schools run by the Ministry of Labour. It services about 120,000,000 GIC Re has contributed approximately 14.96 children in over 1,265,000 schools and Education lakhs towards this programme. Guarantee Scheme centers, it is the largest such programme in the world. 17. Contribution for an Ambulance Machine for Rural Development Trust Hospitals at Kanekal A majority of the student population in India is still in Anantpur, Andhra Pradesh unable to get even one complete square meal for the day, only because they are stuck in the vicious RDT runs three Hospitals located in different circle of poverty and illiteracy. This scheme helps remote areas of Anantapur District to provide to fight malnutrition, to improve the effectiveness medical services to the underprivileged rural of primary education population.

Each annamrita kitchen is equipped with the The hospital provides round the clock ambulance best technology to aid bulk cooking, including facility to refer the patients in emergency or to heavy-weight vegetable-cutting, potato-peeling transfer the patients who need tertiary level machines, steam cookers for fuel efficiency that treatment. also retain 100% of nutrients and an ecofriendly This ambulance facility is considered to be vital. infrastructure. GIC Re has contributed ` 24.75 lakhs GIC Re has contributed an amount of ` 14.96 towards this scheme which would help feed lakhs towards this initiative. children for one year at their Mira Road, Jamshedpur, Kolkata, Ujjain, Jaipur, Pune as well as 18. Contribution of fees for Canteen Boys. Palghar centers . GIC Re have about 15 canteen boys who serve tea/ coffee and carry out other services in Suraksha. As a special initiative, we are contributing to the fees

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of all the canteen boys who are availing night 23. Medical camp at Silvasa through CPAA. school facility. To help them further their education, GIC Re has contributed ` 25,500/- towards their GIC Re has contributed 3.50 lakhs towards fees. towards a health camp at Silvasa through CPAA. 19. Support for the Comprehensive Day Care Programmes of Mumbai Mobile Creche 24. Medical camp at Imphal, Manipur through CPAA MMC is an NGO which was set up in 1972. They have centers at construction sites. At present they have Like in Silvassa, a similar camp was conducted with 23 centers across Mumbai, Navi Mumbai and Thane GIC Re Cooperation at Imphal, Manipur through They provide nutritional and educational support CPAA on the 26th and 27th November, 2015. to the children of migrant workers who work on 25. Renovation of Mumbai Mobile Creche at Construction site. Khindipada, Mulund East through Concern The children of these workers fall in high risk India Foundation section of society. GIC Re has contributed ` 8.05 lakhs towards repair 20. Livelihood Generation for Self Employment to and restructuring of this crèche. the Blind 26. Contribution of Funds of disabled inmates at 22 beneficiaries have benefitted from this Swapna Nagariproject working in Cashew scheme. GIC RE has contributed ` 22.00 lakhs Processing Training Unit for the same. We have provided them popcorn Helpers of the Handicapped, Kolhapur’ (HHK) machine; Xerox machine, stitching machine and flour mill. on 4th January, 2016 which is the Louis HHK caters to the disabled persons from Braille day these items were distributed to the economically backward rural areas. various beneficiaries at their Worli center. GIC Re has contributed a sum of ` 46 lakhs towards 21. Contribution for Mobile Van through construction of quarters for the disabled in Swapna Akshaypatra Nagari Vehicles are a crucial link in the process of meal 27. Mobile Jaipur foot camp at Mumbai distribution to clildren, without which the program is incomplete. GIC Re has contributed towards We have already conducted a mobile Jaipur foot purchase of TATA mobile van and Swaraj Mazda. camp at Cuffe Parade through BMVSS Mumbai The van will be used in Hubli and Bellary. Branch.

22. GIC Re has also contributed funds to support If approved, it is suggested that we contribute an the feeding students @ ` 750 per child for approximate amount of ` 19,00,000/- towards cost academic year 2015-2016 at their Bangalore, of camp in Buldhana to BMVSS Mumbai. Mangalore, Hyderabad, Puri and Approximately 792 beneficiaries are covered Bhubhaneshwar, Bellary centers. during the camp. The camp was held over the period of 8 days. The sole credit for the camp goes to Mr. Vyas who held the BMVSS Mumbai center. It was his and his entire team‘ total initiatve to get

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put people on the drive and endure that the 30. Distribution of School Accessories through information reached the disabled and the SUADHA underprivileged. GIC Re has contributed approx. ` 19.00 lakhs towards a programme by BMVSS Social Upliftment and Development for Health Buldhana. Action (SUADHA): – Is a non – governmental organization working for last six years on different 28. Village Adoption : Phayeng and Thanga Part II, health issues as well as social causes and to ensure Manipur upliftment of the poor and needy people. Approximately 1740 students were covered in this The Department had written to the Rural drive with financial help from GIC Re. Development and Panchayati Raj to all States in India in the month of July, 2015. Manipur was one 31. Contribution to Swachchh Vidyalaya Campaign of the few states to respond positively on this issue. Scheme GIC Re has adopted Phayeng and Thanga Pat II in Manipur. Promotion of Green and Energy efficient GIC Re had contributed to this scheme ` 15.00 technology was one of the programmers crore. implemented here. Also tree plantation has been 32. Contribution of Funds to Tamil Nadu Chief taken up in an area of 40 hectares. Solar lamps are Minister‘s Fund also being put up at 40 locations in both the villages. The 2015 Chennai floods cause tremendous damage in the Southern parts of the country Other initiatives include capacity building which especially in Tamil Nadu. includes empowerment and environment protection. Also initiatives in piggery and poultry To ensure rehabilitation measures GIC Re have been implemented. contributed ` 3.00 crores towards the Tamail Nau Chief Ministr‘s Relief fUND. 29. Village Adoption : Vengurla through Swachhch Bharat Mission 33. Clean Ganga Mission The CSR department wanted to reach out to the Untreated sewage, industrial waste, reduced flow underprivileged through out the country. The state and rampant underground water withdrawals ministry of Maharashtra have responded positively affect millions of people who depend on for their and one of the towns adopted by GIC Re is water needs on Ganga’s water. Vengurla. GIC Re has contributed ` 15.00 crores for Swach It is one of the only councils to have developed Ganga Abhiyaan. the unique model of segregation of waste at source. 34. Plantation activity in Barmer area of Thar Desert. GIC Re has contributed funds for reconstruction of Sulabh toilet complex blocks at their market Sankalp Taru is a technology enabled NGO square. 2 garbage vans and 2 mobile toilets for “planting trees for the people, by the people” in the the floating population on the beach is also dessert state of Rajastan. donated by GIC Re.

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Fast-growing, native species with high productivity 39. Integrated Education Programme through are recommended for restoring the lands in order National Association for Blind. to increase productivity and enrichment of biodiversity. GIC Re has contributed an amount of GIC Re has contributed ` 23.00 lakhs towards ` 20.30 lakhs towards this plantation drive. Integrated Education Programme. 233 Visually Impaired children/students receive the benefit of 35. Village Adoption : Kawalailung and Chhaitlalung, this system. Mizoram 40. Contribution for Acupressure & Massage and GIC Re has contributed ` 50.00 lakhs for both the Physiotherapy courses for visually impaired villages. through National Association for the Blind.

36. Livelihood Generation through Retail Shops : GIC RE has sponsored 2 batches of 15 students each BNGVN amounting to ` 15.60 lakhs.

Driven by the desire of developing her native place- GIC RE has sponsored 2 batches of 15 students each Bahadarpur, Ms. Nilima Mishra, has initiated, amounting to ` 6.00 lakhs. ‘Bhagini Nivedita Gramin Vidnyan Niketan’ Bahadarpur, Jalgaon. Focuses on ‘helping people 41. Contribution for Rehabilitation Courses for to help themselves.’ visually impaired through National Association for the Blind GIC Re has contributed ` 22.62 lakhs for this programme on livelihood generation. Basic Rehabilitation Course

37. Solar System installation in Matoshree The course makes a blind person realize the Three Vruddharam, Than A’s – Accept blindness, Adjust to blindness and Achieve despite being blind. This cost-free training The Govt of Maharashtra started this home for course is conducted twice a year. Each batch is of aged in Nov 1995. 3½- month duration. The 30 trainees admitted per batch are given intensive training to develop skills GIC Re has contributed all funds for installation of in Activities of Daily Living which covers: Self-care the solar system at Matoshree Vrudhashrum. (brushing, bathing, grooming, eating, etc.); Orientation & Mobility (safe indoor and outdoor 38. Construction of School cum Community Center travel techniques using the White Cane); Home at Anantpur Andhra Pradesh through Rural Management (sweeping, making bed, simple Development Trust. mending, cooking, ironing, sewing, identifying currency and so on); Communication (Braille GIC Re contributed funds estimated approx ` 22.00 reading and writing); social etiquette etc. lakhs for construction of school cum community Confidence-building to lead a normal and center at three locations viz: Yerronipalli and productive life takes place through activities like Yedugurralapalli & Dubbarlapalli of MAMILLAPALLI physical training, participation in sporting and area of Aanantapur District Andra Pradesh. cultural activities, visits to public spaces, familiarization with public transport etc. Trainees

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are also provided vocational guidance, exposure 44. Construction Of classrooms in Rebecca to work avenues open to them and assistance in Bellilious English School run by Samaritan Help identifying occupation that suits them most. Mission GIC Re has sponsored 2 batches of candidates for basic rehabilitation course to an extent of ` 12.96 GIC RE has contributed an amount of ` 25.00 lakhs Short-term Need-based Courses lakhs for this purpose.

Course for Adolescent: This preparatory course 45. Ultra sound Machine foR Rotary Ambala Cancer gears up for adult life, youth in transition age – and General Hospital. primarily those who appear for secondary/higher Rotary Ambala Cancer Detection and Welfare secondary exams. Trainees are introduced to Society is a Non-profit NGO that has established community-based experiences; given career Rotary Ambala Cancer and General Hospital with guidance through lectures; and trained in a motive to provide quality treatment at affordable disability-specific skills, physical fitness and basics price. of day-to-day chores. The program helps them recognize and manage the physical, psychological GIC Re has contributed ` 25.00 lakhs towards and emotional changes they go through during purchase of ultra sound machine. this transitional phase, and gives them the confidence to pursue further education. The 46. Mobile Jaipur Foot Camp at Jalna duration of the course is for a month and a half. GIC Re has sponsored a batch for course for GIC Re has contributed ` 19.00 lakhs. adolescents for a cost of ` 3.45 lacs. 47. CANCER DETECTION CAMPS THRU‘ SUADHA Vocational Training Course: Social Upliftment and Development for Health GIC Re has contributed funds for one batch of Action (SUADHA) had proposed to do whole body 30 candidates for vocational training courses to cancer screening on 12th and 19th March 2016 for ` 4.05 lakhs. 200 women. They have covered approximately 100 women each Saturday. Each day they would cover Women’s Special Course: approximately 100 women. The whole body checks up were conducted for the underprivileged For this full-time course exclusively designed for women from in and around Kalyan. These women all-round development of visually challenged were from the underprivileged section of the women GIC Re has sponsored amounting to ` 3.45 society (mostly working as housemaids). lakhs. 48. Contribution to Bhagwan Mahaveer Viklang 42. CPPAA Belgaum Cancer Screening Camp Sahayata Samiti, Bangalore (camp 01.01.16 to 09.01.16) 43. Livelihood Generation through Poultry Farming for the Tribal Women in Purulia, West GIC Re has contributed an amount of ` 25.00 Bengal lakhs for this initiative. The project GIC Re has approved a project to bring 48. GIC Re Scholarships 2015-16 livelihood to 300 tribal women at Kashipur Block in Purulia district of West Bengal trough poultry GIC Re provides scholarships to students of farming. National Insurance Academy (NIA) who are enrolled every year in the PGDM course.

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ECONOMIC ENVIROMENT Finally, though India has benefitted from falling global oil prices, given its status as a net importer of crude oil, India today stands out as a haven of stability and an its trade balance has not improved much, given that outpost of opportunity. Its macro-economy is stable, Indian exports have been contracting for 15 consecutive founded on commitment to fiscal consolidation and low months. inflation. Its economic growth is amongst the highest in the world. INDIAN INSURANCE SECTOR DEVELOPMENTS

These have of course been helped by reorientation of India’s insurance market is expected to quadruple in size the public spending on public infrastructure. Also, it is over the next 10 years from its current size of INR 400,000 remarkable not in the least because these have been crore. During this period, the life insurance market is achieved in the face of adverse global headwinds and a slated to cross INR 10.6 trillion. second successive season of poor rainfall. During April 2015 to March 2016 period, the Indian Indian economy has put up a creditable performance general insurance industry recorded a 12 per cent when compared to other countries, however when growth in Gross Direct Premium underwritten in the gauged on its own potential on what it can achieve in Indian market. During this fiscal the Indian non-life the medium term and long term, though steady progress Insurance industry wrote a premium of ` 96,400 crore. is being made and there is still scope for translating this In the same period the life insurance industry recorded potential into reality. a new premium income of ` 1.38 trillion indicating a As the Indian economy synchronises with the global growth rate of 22.5 per cent. economy, it would certainly be affected by any crisis or India’s life insurance sector is the biggest in the world turmoil that shakes up the global economy. with about 360 million policies which are expected to During the fiscal 2015-16, the Indian economy grew at a increase at a Compound Annual Growth Rate (CAGR) of five-year high growth rate of 7.6 per cent on robust 12-15 per cent over the next five years. manufacturing growth. There are hopes of this growth The insurance industry plans to hike penetration levels rate touching the 8 per cent mark aided by the good to five per cent by 2020.The Indian insurance market is performance of the previous year and on the back of a huge business opportunity waiting to be harnessed. good monsoon that the country is now experiencing. India currently accounts for less than 1.5 per cent of the According to the data released by the Central Statistics world’s total insurance premiums and about 2 per cent Office (CSO) the farm sector also rebounded to the of the world’s life insurance premiums despite being the growth zone, as against a contraction in previous year, second most populous nation. The country is the although the rate of expansion was low at 1.2 per cent fifteenth largest insurance market in the world in terms in 2015--16. The Industry hopes that better monsoon and of premium volume, and has the potential to grow further reforms will help expand the economy at an even exponentially in the coming years. faster pace. During 2015-16GIC Re and 11 other non-life insurers According to International Monetary Fund (IMF), India is jointly formed the India Nuclear Insurance Pool with a expected to grow in a wide range of 7-7.75% in 2016-17 capacity of ` 1,500 crore (US$ 220.08 million) to provide as against 7.6% growth in 2015-16. IMF says that India’s the risk transfer mechanism to the operators and growth will continue to be driven by private suppliers under the CLND Act 2010. consumption, which has benefited from lower energy prices and higher real incomes. Revival of sentiment and pickup in industrial activity plus a recovery of private investment is expected to further strengthen growth.

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INTERNATIONAL AND DOMESTIC BUSINESS COMPOSITION

Premium Split: 2015-16 Premium Split: 2014-15

` 10,195 ` 8661 Crore Crore

Domestic Foreign Domestic Foreign Premium Premium Premium Premium 55% 45% 57% 43%

` 8241 ` 6523 Crore Crore

EARNED PREMIUM BREAK-UP

Earned Premium Share (%) 2015-16 Earned Premium Share (%) 2014-15

GIC Re’S BUSINESS PERFORMANCE CLASS WISE PERFORMANCE

The Corporation’s gross premium income during the year FIRE: 2015-16 is ` 18436 crore and the income from investments was ` 4179.60 crore. Underwriting results Fire business earned premium for the year 2015-16 was show an overall loss of ` 1183 crore in 2015-16 compared ` 4503.95 crore, as compared to ` 3968.71 crore in the to an underwriting loss of ` 1394 crore in the previous previous year. GIC Re’s domestic premium recorded a year. The ratio of total business expenses to the earned growth of 11.31% with ` 1159.80 crore, compared to the premium i.e. Combined Ratio stood at 107.08%. ` 1041.93 crore last year, as a result of higher The Solvency Margin of the Corporation as on 31st March, participation in the treaties of Domestic companies and 2016 was 3.48. by providing innovative reinsurance solutions to the market.

GIC Re’s foreign inward premium grew by 14.26% with ` 3344.15 crore compared to ` 2926.78 crore, in the previous year. The growth was largely due to the

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contribution made by GIC HO and by its foreign improved as there haven’t been major losses except branches, giving GIC Re’s fire portfolio, a global spread. Chennai flood which has only marginal impact on hull portfolio. The net premium income this year stood at The incurred claims stood at ` 3449.22 crore compared ` 553.07 crore as compared to ` 593.48 crore last year. to the ` 2653.89 crore last year, which is an increase of almost 29.96%, mainly due to catastrophic events like The decline of premium was also due to competitive Nepal Earthquake (April 2015), Chennai Floods pricing and economic recession and soft Reinsurance (November - December 2015) and major risk loss like market. The three branch offices have shown marginal Tianjin explosion in China (August 2015). increase in premium while the decline was attributed to The fire portfolio made an underwriting loss of ` 202.94 the domestic premium de-growth. GIC Re continued its crore compared to the profit of ` 273.86 crore incurred effort of control measures to maintain the rates and last year. The combined ratio for fire also stood at 104.5% deductibles in the domestic market; however the as against the 93.1% for last year. increased presence of international players, aggressive pricing to keep up their foothold in the market had its Earned Premium - Fire effects on the domestic market as well. GIC Re considered relaxation in its earlier measures to maintain underwriting discipline with improvement in the domestic portfolio. The increased IBNR provisions also affected the results of head office and branch offices.

GIC Re continues to administer the Hull War risk scheme, Marine Hull pool, monitor the rates and terms and tries to make it more attractive in line with London War risk scheme. GIC Re has started developing a portfolio of port package risk and the results had been encouraging. GIC Re would continue to look positively at the P&I portfolio for both domestic as well as foreign portfolio. Earned Premium - Marine GIC Re has increased its participation with respect to Builders risk portfolio in the domestic market in line with the growing investments in this segment and also in the Russian Market.

MARINE CARGO

Cargo premiums continue to be under pressure following the economic slow-down and substantial capacity further driving down prices. GIC Re’s overall cargo premium for 2015-16 declined by 11.3% over 2014-15. The net premium income this year stood at ` 2997 Mln as against ` 3529 Mln last year irrespective of selective & quality underwriting by the Department. MARINE HULL GIC Re has shown slight growth in the domestic Marine Hull business of GIC Re has shown a moderate premium level as compared to last year, however, the de-growth in premium income this financial year over decline has been more pronounced on the foreign the previous year. The premium de-growth of this year business. New regulatory requirements in China and can be attributed to soft market conditions and Nigeria has resulted in GIC Re not getting the renewal increased capacity globally resulting in premium signings on some treaty accounts. However, GIC Re reduction in the portfolio. However the results were

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continues to seek opportunities in both existing and major incidents that led to claims as against the long alternate markets, especially Russia & Iran. terms average of 69. Further, there were 469 fatalities during the year as against long term average of 574. The The Chennai Flood loss affecting Marine Cargo is about Average fleet values grew by 5% and passenger numbers ` 9.34 Mln for GIC Re. Besides other attritional losses on grew by about 7%. The capacity in the aviation the direct side, coupled with IBNR provisioning has re/insurance market continued to be abundant resulted in reduced incurred loss ratio of 61.3% for the impacting the rates. The total lead hull and liability year under review as against 94.3% in the previous year. premium declined from USD1.4 billion in 2014 to USD1.25 billion in 2015. GIC Re has renewed the two Marine Protection programs i.e. (i) Combined Marine & Energy and (ii) Foreign Hull & Considering the soft trends in the market, GIC Re Cargo effective 1st May 2016 with increased capacity, intended to hold on to its existing book while exploring more relaxations & flexibility. These programs will enable avenues for diversification of the portfolio and one such GIC Re to write more domestic as well as international initiative was to expand into the Space insurance business with reinsurance protection. segment. Though GIC Re has been writing Space Treaty business within Aviation Department, as part of its The revival of Indian economy and new policies expected initiative to bring in diversification, GIC Re has to drive growth, translate in increase in Marine Cargo commenced writing space facultative business also. business. GIC Re will be looking for more opportunities. The aviation portfolio was impacted by Chennai flood OIL AND ENERGY losses. However, the robust reinsurance arrangements ensured that the net loss to GIC Re’s share remained at GIC Re’s aim has been to develop the oil and energy ` 13.75 crore. The earned premium for 2015-16 was portfolio whilst at the same time adopting a disciplined ` 470.56 crore marginally below the earned premium of underwriting approach. ` 472.22 crore for 2014-15. The cautious and selective The strategy has worked well in that off-shore oil & approach enabled the combined ratio for the portfolio energy business continues to show growth albeit improve from 106.7 in 2014-15 to 86.3 in 2015-16 increase of 10% over the previous year. The combined ratio for 2015-16 stands at healthy 45%. Foreign business Earned Premium - Aviation predominates with 72.5% of total energy premium, thereby reflecting GIC Re’s position as a recognized capacity provider.

The down-ward cycle in crude oil prices resulting in lower capital investment in the energy sector is one area of concern for premium growth. Coupled with substantial energy capacity and no major claims is further driving down prices.

However, with increased capacity and protection for Gulf of Mexico, Iran, etc., GIC would be able to explore more opportunities in these areas. In 2015 Incurred loss for the year is ` 330 crore. The major OTHER MISCELLANEOUS claims during the year were Flydubai, Losses due to the Chennai Floods, Spice Jet, Asiana Airlines, Airbus, Mexsat AVIATION Satellite Loss and Air Bagan.

The year 2015 was an impressive year for the airline industry from a safety perspective evidenced by 43

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LIABILITY GIC Re’s international Agriculture portfolio is well diversified and consists of business from various The Liability portfolio, for Casualty and Financial Lines countries predominantly in Asia. remained stable. Despite soft market, it continued to experience growth in Liability business, mainly due to The total Reinsurance premium for Agriculture portfolio increase in awareness of the corporate sector of the accounted in 2015-16 is ` 1,323 crore. Out of total liability products. With more companies expanding their premium in 2015-16; Indian market contributes for Liability portfolios, GIC Re has shown a growth of 30% ` 1,295.9 crore while ` 29.96 crore is written from rest of as compared to 2014-15. Obligatory cessions continued the world. to remain at 5% with increased capping limits of cession for both casualty and financial lines. No major losses have HEALTH been reported for the financial year 2015-16 GIC Re’s Health portfolio comprises mostly of Obligatory ` in crore cessions, some selective domestic treaties besides the 2015-16 2014-15 Growth Health Business written by the foreign branches. % ` in crore Gross Written 150.53 115.35 30.50 2015-16 2014-15 Growth Premium %

Earned Premium 122.60 95.61 28.23 Gross Written 2504.19 2104.98 18.97 Premium Incurred Claims 58.36 (5.75)* Earned Premium 2305.19 1866.60 23.50 * Net losses paid stands at 20.56 crore while outstanding reserve of 26.31 crore was released. Incurred Claims 2127.20 2129.12 (0.09)

AGRICULTURE REINSURANCE Health

GIC Re continued its Agriculture Reinsurance portfolio during the year by providing reinsurance support for agriculture and index based weather & yield insurance schemes.

Agriculture Reinsurance (Health) Earned Premium (INR crore) (Health) Incurred Claims (INR crore)

MOTOR

The Gross / Net Motor Premium during the year 2015-16 was ` 4,488.29 crore as against ` 3,852.29 crore in corresponding previous year, registering a growth rate of 16.51%.

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Earned premium for the year stands at ` 4,146.88 crore This fiscal year witnessed motor foreign business as compared to ` 3,649.07 crore in the previous year, registering a remarkable growth and increasing its share registering commendable growth rate of 13.64%. of GIC Re’s motor portfolio on gross written premium basis by 4.78%. The increase makes portfolio Incurred claims for the year were ` 3,899.17 crore as contribution from foreign motor business at 26.48% as compared to ` 3,887.44 crore in previous year. There is a compared to 21.71% in the previous year. This shift drives fractional increase of 0.30% showing a trend of stability. the domestic market share (including obligatory gross premium) to 73.52% of GIC Re’s motor portfolio as ( ` in Crore) compared to 78.30 % in the previous year. 2014-15 2015-16 Growth % The trend of increasing business contribution from foreign markets is a promising move and in-line with the Gross Written 3,852.29 4,488.29 16.51% business strategy of the organisation to attain a 50-50 Premium balance of domestic-foreign market presence. Moreover, it reaffirms the basic principle of reinsurance - Earned Premium 3,649.07 4,146.88 13.64% ‘Spread the risk’ across geographic territories & importantly Incurred Claims 3,887.44 3,899.17 0.30% marks expansion of motor business in foreign territories and growing significance of brand ‘GIC Re’ globally.

Motor Class Portfolio Contribution (GWP Basis) (` in Crore)

GIC Re Domestic % of Foreign % of Market GIC Re Market GIC Re

2014-15 3,852.29 3,016.14 78.29% 836.16 21.71%

2015-16 4,488.29 3,299.63 73.52% 1,188.67 26.48%

Growth YOY % 16.51% 9.40% 42.16%

Earned Premium - Motor has been constantly endeavoring to provide sufficient capacity to cedants through treaty and facultative arrangements. ` in crore 2015-16 2014-15 Growth %

Gross Written 1646.33 1234.90 33.32 Premium

Earned Premium 1224.84 1158.43 5.73

Incurred Claims 1605.49 868.93 84.77

OTHER MISCELLANEOUS

Miscellaneous and PA portfolio has shown positive growth of over 30% in the year 2015-16 The Department

ANNUAL REPORT 2015-2016 65 Management Discussion and Analysis Report

PA ` in crore Earned Premium 2015-16 2014-15 Growth %

Gross Written 380.52 269.13 41.39 Premium

Earned Premium 322.41 323.87 (0.45)

Incurred Claims 157.09 206.89 (24.07)

LIFE REINSURANCE

The Indian Life Insurance industry is one of the strongest growing sectors in the country. Currently a US$ 41-billion companies in India in April 2002, after terrorism cover Industry, India is the fifth largest life insurance market. was withdrawn by international reinsurers post-9/11. Today there are 24 Life Insurance companies operating The Pool has thus completed thirteen years of successful in India. operations. All Indian non-life insurance companies (excluding monoline Insurers) and GIC Re are members Indian Life Insurance has shown growth of 22.55% for of the Pool. The Pool is applicable to insurance of new business premium for the year 2015-16. LIC has terrorism risk covered under property insurance policies. shown growth of 24.74% whereas Private Insurers have Capacity offered by the Pool is currently at ` 15,000 shown growth of 17.63%. million per location for terrorism risk. Premium rates were Gross Life Re Premium of the Corporation has increased revised downward under the Pool arrangement w.e.f. st to ` 230.65 crore from ` 157.32 crore in the previous 01 April 2014. year, a growth of 46.61%. Earned premium has increased In order to improve the market penetration for Terrorism this year to ` 237.56 crore from ` 130.43 crore in the last Risk Insurance with better marketing by Brokers / Agents, year. Operating profit has increased to ` 58.47 crore from the regulator has allowed a Brokerage of upto 5% w.e.f. ` 27.56 crore. 01.01.2014 for Terrorism Insurance business procured The Government of India has launched the Pradhan through Brokers. Mantri Jeevan Jyoti Bima Yojana (PMJJBY) in the current GIC Re continues to successfully administer the Pool. year. GIC Re has supported this initiative by extending Apart from its role as Pool Manager, GIC Re also its reinsurance support to various Life Insurance contributes capacity to the Pool and participates as a Companies. This scheme has generated reinsurance reinsurer on the Pool’s excess of loss reinsurance premium of ` 39.34 crore and claims of ` 36.83 crore for protection. 2015-16. The Pool’s premium income for 2015-16 was ` 475.93 TERRORISM INSURANCE POOL crore and the claims paid during 2015-16 were ` 2.04 The Indian Market Terrorism Risk Insurance Pool was crore. No major losses were reported to the Pool during formed as an initiative by all the non-life insurance 2015-16.

66 ANNUAL REPORT 2015-2016 Management Discussion and Analysis Report

SEGMENTWISE CLAIMS EXPERIENCE (` in crore) INDIAN FOREIGN Earned Incurred Incurred Earned Incurred Incurred Premium Claims Claims Ratio Premium Claims Claims Ratio

Fire 2015-16 1159.80 1650.33 142% 3344.15 1798.89 54%

Fire 2014-15 1041.93 758.15 73% 2926.78 1895.74 65%

Engineering 2015-16 362.18 -34.14 -9% 372.81 268.41 72%

Engineering 2014-15 380.72 282.67 74% 357.80 167.99 47%

Marine 2015-16 311.44 210.47 68% 632.09 422.34 67%

Marine 2014-15 252.03 331.51 132% 681.43 660.41 97%

Misc. Other 2015-16 3038.70 3006.91 99% 1096.67 1177.10 107%

Misc. Other 2014-15 2599.12 2447.51 94% 1066.72 958.29 90%

Life 2015-16 181.74 107.15 59% 55.82 62.84 113%

Life 2014-15 95.75 102.70 107% 34.68 -9.43 -27%

Aviation 2015-16 58.76 88.40 150% 411.80 242.00 59%

Aviation 2014-15 86.83 29.80 34% 385.39 378.98 98%

Motor 2015-16 3157.88 3017.36 96% 989.00 881.80 89%

Motor 2014-15 2783.97 2932.98 105% 865.10 954.46 110%

Total 2015-16 8270.50 8046.48 97% 6902.34 4853.38 70%

Total 2014-15 7240.35 6885.32 95% 6317.90 5006.44 79%

ANNUAL REPORT 2015-2016 67 Management Discussion and Analysis Report

INVESTMENT campaign was launched in July 2015 with an aim to train over 400 million people in India in different skills. Global growth in 2015, was marginally lower than in previous year. There was a gradual pickup in advanced Private sector CAPEX (Capital Expenditure) has remained economies and a slowdown in emerging market and weak due to highly leveraged balance sheets coupled developing economies. with poor sales growth of corporates. Governments’ continued effort in reviving the CAPEX angle of the India has emerged as the fastest growing major economy through enhanced public spending is economy in the world as per the Central Statistics expected to provide a relief to the sector. This will result Organisation (CSO) and International Monetary Fund in consistent IIP (Index of Industrial production) growth (IMF). According to the Economic Survey 2015-16, the in future. Indian economy will continue to grow more than 7 per cent in 2016-17. India’s macro fundamentals have Although global macroeconomic conditions seem remained robust mainly due to drop in commodity to be volatile, the Indian macroeconomic condition is prices and strong policy measures taken up by Union relatively stable and signaling better prospects of growth Government. from upward revision in the growth estimates. The dynamism in the Indian economy was largely driven by The improvement in India’s economic fundamentals has infrastructure sector (like roads, railways, power stations) accelerated in the year 2015 with the combined impact and manufacturing, especially in defense sector, but of strong government reforms, RBI’s inflation focus revival in domestic demand and policy initiatives along supported by benign global commodity prices. India was with financial support are the underlying drivers of rise ranked the highest globally in terms of consumer in economy activity. Lower commodity prices (of metals confidence during October-December quarter of 2015, and crude oil) are also contributing positively due to the continuing its earlier trend of being ranked the highest lower input costs. during first three quarters of 2015, as per the global consumer confidence index created by Nielsen. The Based on IRDA guidelines, the Corporation invests 45 per Union Budget for FY 2017 also added to path of fiscal cent in Directed Sector comprising Central/State consolidation. The fiscal deficit of Union Government Government Securities, Government Guaranteed Bonds, has improved from 5.9 per cent GDP in FY 2012 down to Housing and Infrastructure Sector. Balance 55 per cent 3.9 per cent in FY 2016 and is budgeted at 3.5 per cent is invested in Market Sector and these investments are in FY 2017. subject to prudential and exposure norms.

Indian economy is expected to grow at 7-7.75 per cent The book value of investment of the Corporation stood during FY 2016-17, despite the uncertainties in the global at ` 34,050.25 crore as against ` 30,694.38 crore showing market. The Economic Survey 2015-16 had forecasted an increase of ` 3,355.87 crore representing a growth of that the Indian economy will be growing by more than 10.93 per cent over the previous year. Income from seven per cent for the third successive year 2016-17 and investments stood at ` 4,174.99 crore with a mean yield can start growing at eight per cent or more in next two on funds at 12.91 per cent. The net non-performing years. assets percentage was at 1.08 per cent.

Foreign direct investment (FDI) in India have increased GIC Re’s Reinsurance Program post the launch of Make in India campaign. Digital India, a campaign launched by the Government of India in The Corporation has arranged both Risk and Catastrophe 2015 ensures that Government services are made Excess of Loss Reinsurance, in respect of various classes available to citizens electronically by improving online of Business, for protecting its net retained portfolios infrastructure by making the country digitally under domestic business. On large sized risks, wherever empowered in the field of technology. Skill India

68 ANNUAL REPORT 2015-2016 Management Discussion and Analysis Report

necessary, the Corporation arranges for facultative retro. Further, with resurgence in economic growth and CAT protection has also been arranged for select improvement in general business climate aided by the business and territories in respect of Foreign Inward reform measures undertaken the insurance industry Business. hopes to ride the wave and scale newer heights.

The Corporation has in place a Structured Solution The Indian insurance industry is geared up to meet the Contract to which cessions under both domestic and new and complex demands of public in respect of new foreign business are made across classes of business. innovative products in sync with the dynamically Placements have been made with securities meeting the changing environment. stipulations laid down by the Regulator. With the advent of new companies and international FUTURE OUTLOOK practices, the regulatory aspects are also expected to turn more proactive and would be aligned to consumer During 2016-17 the insurance sector in India expects to protection. The insurers would be required to follow a see substantial changes. With the increase in Foreign stricter regime in terms of due diligence, prudent risk Direct Investment limit in the sector and opening up the management and investment practices, and fair reinsurance sector for foreign reinsurers, the sector is marketing and service parameters. expected to see entry of major global reinsurance players. In addition demographic factors such as growing middle class, young insurable population and growing The sector is also likely to undergo further consolidation awareness of the need for protection and retirement through mergers and acquisitions. The global players, as planning besides rising awareness of climate change and they bring with them benchmark global practices, are resultant natural catastrophes will support the growth expected to further improve and streamline our of Indian insurance industry in the times ahead. prevailing market practices.

The risk management framework is expected to be fine- tuned to match with global standards coupled with innovation in product designs and distribution networks.

The low-penetration in the Indian insurance market offers immense potential for growth. With growing financial awareness and inclusion, specific awareness about the insurance sector also would grow, which in combination with affirmative actions by the Government and the insurers will usher in a positive change.

ANNUAL REPORT 2015-2016 69 Management Report

In accordance with Part IV of Schedule B of the Insurance 8. The Corporation’s overall top ten exposures in other Regulatory and Development Authority (Preparation of countries are as follows: Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, the management of the United Arab Emirates, Saudi Arabia, Israel, Taiwan, Corporation hereby: Turkey, Oman, South Korea, Kuwait, U.S.A., Indonesia.

1. Confirms that the Registration No. 112 granted by Exposures written for above countries have been the Authority continues to be valid. covered for a limit of USD 10 Mln. xs USD 10 Mln. under the Risk-cum-Cat XL cover. 2. Certifies that all the dues payable to the statutory authorities have been duly paid. Catastrophic protection beyond the Corporation’s authorized retentions have been purchased up to a 3. Confirms that the shareholding pattern as well as limit of USD 150/200 Mln. as applicable. transfer of shares during the year is in accordance with the statutory or regulatory requirements. The Corporation has a Reinsurance Protection Policy in place duly approved by the Board. 4. Declares that the funds of the holders of policies in India are not directly or indirectly invested outside 9. Certifies that the Corporation does not operate India. directly in any other country. It has its representative office at Moscow and Branch Offices at Kuala Lumpur, 5. Confirms that the required solvency margins have Dubai and London. been maintained. 10. The Corporation being a reinsurance company does 6. Certifies that the values of all the assets of the not settle claims directly to the insured except in the Corporation including that of Terrorism Insurance case of run off liabilities in Aviation department. The Pool business for which GIC Re is acting as Manager, portion of the claims recoverable under the have been reviewed on the date of the Balance Sheet reinsurance obligations of the Corporation are and that in our belief the assets set forth in the settled with the reinsured through periodical Balance Sheet are shown in the aggregate at accounts statements. The position of outstanding amounts not exceeding their realisable or market claims under the categories of Indian, Foreign value under the several headings- “Loans”, Inward and Aviation Business are as disclosed in “Investments”, “Interest, Dividends and Rents Note No. 19 of the Disclosures forming part of outstanding”, “Interest, Dividends and Rents accruing Financial Statements. but not due”, “Amounts due from other persons or Bodies carrying on insurance business”, “Sundry 11. This is to certify that the values as shown in the Debtors”, “Cash” and the several items specified under balance sheet, of the investments and stocks and “Other Accounts”. shares have been arrived at as stated in Significant Accounting Policies No. 7 . 7. Confirms that the Corporation’s risk exposure consists of a) Obligatory and Additional Quota Share 12. Declares that the review of asset quality and Cessions; b) Facultative support given to Indian performance is as mentioned below for Loans and Insurance companies; c) The Corporation’s share in Investments: Indian Insurance companies through First/Second LOANS Surplus Treaties and Excess of Loss programme; d) The Corporation’s share in Market Surplus Treaties Loan Assets (including loans to employees) as on and e) Foreign Inward business accepted. The 31.03.2016 stood at ` 365.78 crore compared to ` 393.84 exposures are adequately protected by the crore in the previous year. Out of the total loan amount Corporation’s reinsurance programme for 2015-16. of ` 365.78 crore, ` 358.94 crore are either secured or

70 ANNUAL REPORT 2015-2016 Management Report

guaranteed by the Government bodies representing ii. The management has adopted accounting 98.13% and the balance ` 6.84 crore are unsecured. policies and applied them consistently Interest income from loans amounted to ` 40.83 crore. (including those specifically required by various Standard performing assets account for ` 295.56 crore IRDA regulations) and made judgments and and an amount ` 70.21 crore has been provided for the estimates that are reasonable and prudent so non-performing assets. as to give a true and fair view of the state of affairs of the company at the end of the financial INVESTMENTS year and of the operating profit and net profit of the company for the year. The book value of the investment as on 31.03.2016 has increased to ` 34,050.25 crore from ` 30,694.37 crore. iii. Proper and sufficient care for the maintenance The realizable value of investments is at ` 57,500.98 crore of adequate accounting records in accordance as on 31.03.2016 showing an appreciation of 68.87% with the applicable provisions of the Insurance over book cost. Income from investment including Profit Act, 1938/Companies Act, 2013, for safeguarding on Sale amounted to ` 4,174.99 crore as against ` 4,176.06 the assets of the company and for preventing crore in the previous year. Of the total investment of and detecting fraud and other irregularities have ` 34,050.25 crore, ` 12,315.25 crore are invested in been taken. Government Securities and State guaranteed Bonds. Book Value of equity shares is at ` 7,824.66 crore and iv. The financial statements are prepared on a market value stood at ` 31,183.14 crore showing an going concern basis. appreciation of ` 23,358.48 crore (298.52%) v. The management has ensured that an internal The Corporation has complied with the regulation of audit system commensurate with the size and investments prescribed by IRDA for the purpose of nature of the business exists and is operating investment limits in housing and infrastructure and effectively. social sector. The compliance has been made on aggregate basis. 14. Certifies that no payment has been made to individuals, firms, companies and organisations in 13. Confirms that : which the Directors of the Corporation are interested.

i. In the preparation of financial statements, the For and on behalf of the Board of Directors applicable accounting standards, principles and policies have been followed along with proper Alice G Vaidyan explanations relating to material departures. Chairman-cum-Managing Director DATE: 29.6.2016

ANNUAL REPORT 2015-2016 71 Independent Auditors’ Report

To completeness of the accounting records, relevant to The Members of the preparation and presentation of the financial GENERAL INSURANCE CORPORATION OF INDIA statements that give a true and fair view and are free from material misstatement, whether due to fraud 1. Report on Standalone Financial Statements or error. We have audited the accompanying standalone 3. Auditors’ Responsibility financial statements of GENERAL INSURANCE CORPORATION OF INDIA (‘the Corporation’), Our responsibility is to express an opinion on these which comprise the Balance sheet as at March 31, standalone financial statements based on our audit. 2016, the Revenue Accounts of Fire, Miscellaneous, We have taken into account the provisions of the Act, Marine and Life Insurance and the Profit and Loss the accounting and auditing standards and matters Account and the Cash flow statement for the year which are required to be included in the audit report then ended and a summary of significant accounting under the provisions of the Act and the Rules made policies and other explanatory information, in which thereunder. are incorporated the returns of three Foreign We conducted our audit in accordance with the Branches audited by branch auditors appointed by Standards on Auditing specified under Section Comptroller and Auditor General of India, New Delhi 143(10) of the Act. Those Standards require that we and one Foreign Representative Office certified by comply with ethical requirements and plan and the local Auditor appointed by the Corporation. perform the audit to obtain reasonable assurance 2. Management’s Responsibility for the Financial about whether the financial statements are free from Statements material misstatement. The Corporation’s Board of Directors is responsible An audit involves performing procedures to obtain for the matters stated in Section 134 (5) of the audit evidence about the amounts and the Companies Act, 2013 (“the Act”) with respect to disclosures in the financial statements. The preparation and presentation of these standalone procedures selected depend on the auditor’s financial statements that give a true and fair view of judgment, including the assessment of the risks of the financial position, financial performance and cash material misstatement of the financial statements, flows of the Corporation in accordance with the whether due to fraud or error. In making those risk Insurance Act, 1938, the accounting principles as assessments, the auditor considers internal financial prescribed in Insurance Regulatory and control relevant to the Corporation’s preparation of Development Authority of India (IRDAI) (Preparation the financial statements that give a true and fair view of Financial Statements and Auditor’s Report on in order to design audit procedures that are Insurance Companies) Regulations, 2002 and orders appropriate in the circumstances. An audit also or direction issued by the IRDAI including includes evaluating the appropriateness of the Accounting Standards specified under Section 133 accounting policies used and the reasonableness of of the Act, read with Rule 7 of the Companies the accounting estimates made by the Corporation’s (Accounts) Rules, 2014. This responsibility also Directors, as well as evaluating the overall includes maintenance of adequate accounting presentation of the financial statements. records in accordance with the provisions of the Act We believe that the audit evidence we have obtained for safeguarding the assets of the Corporation and is sufficient and appropriate to provide a basis for for preventing and detecting frauds and other our audit opinion on the standalone financial irregularities; selection and application of statements. appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 4. Opinion design, implementation and maintenance of In our opinion and to the best of our information adequate internal financial controls, that were and according to the explanations given to us, the operating effectively for ensuring the accuracy and

72 ANNUAL REPORT 2015-2016 Independent Auditors’ Report

financial statements are prepared in accordance with 7. Reports on Other Legal & Regulatory the requirements of the Insurance Act, 1938, IRDAI Requirements (Preparation of Financial Statements and Auditor’s As required by section 143(3) of the Act, we report Report on Insurance Companies) Regulations, 2002 that: and the Act, 2013, to the extent applicable and in the manner so required and the financial statements a. We have sought and obtained all the read with significant accounting policies and notes information and explanations which to the best thereon, give a true and fair view in conformity with of our knowledge and belief were necessary for the accounting principles generally accepted in India the purposes of our audit. as applicable to insurance companies of state of b. In our opinion proper books of account as affairs of the Corporation as at 31st March, 2016 and required by law have been kept by the of surplus of revenue accounts of Fire, Miscellaneous, Corporation so far as it appears from our Marine and Life business and its profit and its cash examination of those books and proper returns flows for the year ended on that date. adequate for the purpose of our audit have been 5. Emphasis of matter received from the branches and representative office not visited by us. a. We draw attention to Note no. 3 (c) to the financial statement in respect of applicability of c. The reports of three foreign branches on the prudential norms for provision on investment accounts of the branch offices of the in State Government Securities for the reason Corporation audited by branch auditors and one stated in the said note. Our opinion is not representative office certified by other auditor qualified in respect of this matter. under section 143 (8) of the Act have been sent to us and have been properly dealt with by us b. We draw attention to Note no. 48 to the financial in preparing this report. statement in respect of fraud on the Dubai branch of the Corporation, on account of d. The Balance Sheet, Revenue Accounts, Profit and unauthorized bank transfer. Our opinion is not Loss Account and Cash flow statement dealt qualified in respect of this matter. with by this report are in agreement with the books of account and with the returns received 6. Other matter from branches and representative office not We did not audit the financial statements/ visited by us. information of three foreign branches and one e. The Balance Sheet, The Revenue Accounts and foreign representative office included in the the Profit and Loss Account have been drawn in standalone financial statements of the Corporation accordance with the Insurance Act, 1938, the whose financial statements/financial information IRDAI Act, 1999 and the Act except for the Cash reflect total assets of ` 5,763.94 Crore as at Flow Statement, (Refer Note 44) which is March 31, 2016 and total revenues of ` 3,114.27 Crore prepared under Indirect Method, where as IRDAI for the year ended on that date, as considered in the regulations require Cash Flow Statement to be standalone financial statements. The financial prepared under direct method. statements/information of these branches and representative office have been audited by the other f. The actuarial valuation of liabilities is duly auditors whose reports have been furnished to us, certified by the appointed actuary including to and our opinion in so far as it relates to the amounts the effect that the assumptions for such and disclosures included in respect of these valuation are in accordance with the guidelines branches and office, is based solely on the report of issued by the Institute of Actuaries of India to such other auditors. its members and has been forwarded to IRDAI. Our opinion is not qualified in respect of this matter. g. On the basis of the written representations received from the directors as on March 31, 2016

ANNUAL REPORT 2015-2016 73 Independent Auditors’ Report

taken on record by the Board of Directors, none with the number of cases and reasons there fore of the directors is disqualified as on March 31, [Refer note no. 5]. The total amount of interest 2016 from being appointed as a director in terms waived off during the year is ` 242.55 thousand. of Section 164 (2) of the Act. The total amount of debts written off during the year for the 2 companies are ` 7,414 thousand. h. In our opinion, the aforesaid standalone financial statements comply with the Accounting iii. The Corporation is involved in re-insurance Standards specified under Section 133 of the business. Accordingly it does not hold Act, read with Rule 7 of the Companies inventories. Thus reporting under this direction (Accounts) Rules, 2014 and are also in conformity is not applicable. The Corporation has not with the accounting principles as prescribed in received gift from Government or any the IRDAI Regulations. authorities. i. Investments have been valued in accordance iv. The Corporation has disclosed the impact in its with the provisions of the Insurance Act, 1938 financial statement due to difference between (4 of 1938) and IRDAI (Auditor’s report) title of ownership in respect of CGS/SGS/ Regulations, 2002. bonds/Debentures/Shares available in physical/demat format vis a vis amount shown j. The accounting policies selected by the in the books. [Refer note no. 6] Corporation are appropriate and are in compliance with the applicable accounting v. Provision in respect of employee liabilities for standards and with the accounting principles, pension fund, leave encashment, gratuity, as prescribed in the IRDAI (Auditor’s report) provident fund and settlement as well as Regulations, 2002 or any order or direction provision for IBNR are made as per actuarial issued by the IRDAI in this behalf. valuation. On verification of test check basis, data provided by the corporation is accurate and k. The Corporation being the Insurance Company, complete. The benchmark used by the actuary the Companies (Auditor’s Report) Order, 2016 for assumptions seems to be appropriate. (“the order”) as amended, issued by the Central [Refer Note No. 30 (f) & 24]. Government of India in terms of sub-section (11) of section 143 of the Act is not applicable. vi. The Corporation has given timely claim loss advices to the reinsurers in respect of l. With respect to the adequacy of the internal reinsurance ceded business. In case of financial controls over financial reporting of the reinsurance inward business, the Corporation Corporation and the operating effectiveness of has ensured that all information/advices such controls, refer to our separate report in received have been considered for adequate “Annexure A”. provisions in the books of the Corporation. m. With respect to the directions issued by vii. On receipt of advice from cedents/brokers, the Comptroller and Auditor General of India as per Corporation has accounted for profit Section 143 (5) of the Act, in our opinion and to commission payable in respect of inward the best of our information and according to the insurance acceptances and receivables in explanations given to us: respect of outward insurance acceptances in all i. The Corporation has clear title/lease deeds for eligible cases. freehold and leasehold land. n. With respect to the other matters to be included ii. The Corporation has disclosed the impact of in the Auditors’ Report in accordance with Rule waiver/write off of debts/loans/interest and 11 of the Companies (Audit and Auditors) Rules, equity shares in its financial statements along 2014, in our opinion and to the best of our

74 ANNUAL REPORT 2015-2016 Independent Auditors’ Report

information and according to the explanations iii. We have verified the cash balances, investments given to us: and securities relating to loans given by the Corporation on test check basis, by actual i. The Corporation has disclosed the impact inspection or by production of certificates or of pending litigations on its financial position other documentary evidence except to the in its financial statements. [Refer Note 40 (g)]; extent of investments of the value aggregating ii. The Corporation has made provision, as required to ` 1221 thousands as mentioned in Notes 1(a) under the applicable law or accounting to the accounts. standards, for material foreseeable losses, if any, iv. The Corporation has not undertaken any on long-term contracts including derivative transaction relating to any trust as a trustee. contracts. [Refer Schedule 13 & 14]; However, the Corporation is acting as a Manager iii. There has been no delay in transferring of Terrorism pool and the investments, assets amounts, required to be transferred, to the and liabilities pertaining to it are disclosed Investor Education and Protection Fund by the separately in accounts. Corporation. v. No part of the assets of the policyholders’ funds j. We further certify that have been directly or indirectly applied in i. We have reviewed the management report and contravention of the provisions of the Insurance there is no apparent mistake or material Act, 1938 (4 of 1938) relating to the application inconsistencies with the financial statements. and investments of the policyholders’ funds. ii. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority (IRDAI).

For, GBCA & Associates For, Samria & Co. Chartered Accountants Chartered Accountants ICAI Firm Regn. No.103142W ICAI Firm Regn. No. 109043W Yogesh Amal Adhar Samria Partner Partner Membership No. 111636 Membership No.049174

Place : Mumbai Date : June 29, 2016

ANNUAL REPORT 2015-2016 75 Annexure - A to the Auditors’ Report

Annexure - A to the Auditors’ Report whether adequate internal financial controls over financial reporting was established and maintained and Report on the Internal Financial Controls under if such controls operated effectively in all material Clause (i) of Sub-section 3 of Section 143 of the respects. Companies Act, 2013 (“the Act”) Our audit involves performing procedures to obtain We have audited the internal financial controls over audit evidence about the adequacy of the internal financial reporting of General Insurance Corporation financial controls system over financial reporting and of India (“the Corporation”) as of March 31, 2016 their operating effectiveness. Our audit of internal in conjunction with our audit of the standalone financial controls over financial reporting included financial statements of the Corporation for the year obtaining an understanding of internal financial controls ended on that date. over financial reporting, assessing the risk that a material Management’s Responsibility for Internal Financial weakness exists, and testing and evaluating the design Controls and operating effectiveness of internal control based on The Corporation’s management is responsible for the assessed risk. The procedures selected depend on establishing and maintaining internal financial controls the auditor’s judgment, including the assessment of the based on the internal control over financial reporting risks of material misstatement of the financial statements, criteria established by the Corporation considering the whether due to fraud or error. essential components of internal control stated in the Commensurate to the size and nature of the business, Guidance Note on Audit of Internal Financial Controls we believe that the audit evidence we have obtained is over Financial Reporting issued by the Institute of sufficient and appropriate to provide a basis for our audit Chartered Accountants of India (‘ICAI’). These opinion on the Corporation’s internal financial controls responsibilities include the design, implementation and system over financial reporting. maintenance of adequate internal financial controls that Meaning of Internal Financial Controls over Financial were operating effectively for ensuring the orderly and Reporting efficient conduct of its business, including adherence to Corporation’s policies, the safeguarding of its assets, the A Corporation’s internal financial control over financial prevention and detection of frauds and errors, the reporting is a process designed to provide reasonable accuracy and completeness of the accounting records, assurance regarding the reliability of financial reporting and the timely preparation of reliable financial and the preparation of financial statements for external information, as required under the Companies Act, 2013. purposes in accordance with generally accepted accounting principles. A Corporation’s internal financial Auditors’ Responsibility control over financial reporting includes those policies Our responsibility is to express an opinion on the and procedures that (1) pertain to the maintenance of Corporation’s internal financial controls over financial records that, in reasonable detail, accurately and fairly reporting based on our audit. We conducted our audit reflect the transactions and dispositions of the assets of in accordance with the Guidance Note on Audit of the Corporation; (2) provide reasonable assurance that Internal Financial Controls over Financial Reporting (the transactions are recorded as necessary to permit “Guidance Note”) and the Standards on Auditing, issued preparation of financial statements in accordance with by ICAI and deemed to be prescribed under section generally accepted accounting principles, and that 143(10) of the Companies Act, 2013, to the extent receipts and expenditures of the Corporation are being applicable to an audit of internal financial controls, both made only in accordance with authorisations of applicable to an audit of Internal Financial Controls and, management and directors of the Corporation; and (3) both issued by the Institute of Chartered Accountants provide reasonable assurance regarding prevention or of India. Those Standards and the Guidance Note require timely detection of unauthorised acquisition, use, or that we comply with ethical requirements and plan and disposition of the Corporation’s assets that could have a perform the audit to obtain reasonable assurance about material effect on the financial statements.

76 ANNUAL REPORT 2015-2016 Annexure - A to the Auditors’ Report

Inherent Limitations of Internal Financial Controls Opinion over Financial Reporting In our opinion, commensurate with the size & nature of Because of the inherent limitations of internal financial business, the Corporation has, in all material respects, an controls over financial reporting, including the possibility adequate internal financial controls system over financial of collusion or improper management override of reporting and such internal financial controls over controls, material misstatements due to error or fraud financial reporting were operating effectively as at may occur and not be detected. Also, projections of any March 31, 2016, based on the internal control over evaluation of the internal financial controls over financial financial reporting criteria established by the reporting to future periods are subject to the risk that Corporation considering the essential components of the internal financial control over financial reporting may internal control stated in the Guidance Note on Audit of become inadequate because of changes in conditions, Internal Financial Controls Over Financial Reporting or that the degree of compliance with the policies or issued by the Institute of Chartered Accountants of India. procedures may deteriorate.

For GBCA & Associates For Samria & Co., Chartered Accountants Chartered Accountants Firm Regn. No. 103142W Firm Regn. No. 109043W Yogesh Amal Adhar Samria Partner Partner Membership No. 111636 Membership No. 049174

Place : Mumbai Date : June 29, 2016

ANNUAL REPORT 2015-2016 77 Comments of the Comptroller and Auditor General of India

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2OI3 ON THE FINANCIAL STATEMENTS OF GENERAL INSURANCE CORPORATION OF INDIA FOR THE YEAR ENDED 31 MARCH 2016

The preparation of financial statements of General lnsurance Corporation of India for the year ended 31 March 2016 in accordance with the financial reporting framework prescribed under the lnsurance Act, 1938 read with the lnsurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor’s Report of lnsurance Companies) Regulations, 2002 and the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act are responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 29 June 2016.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of General Insurance Corporation of India for the year ended 31 March 2016. This supplementary audit has been carriedout independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(a) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report:

A. Comments on Financial Position Balance Sheet Application of Funds

Current Assets Advances and Other Assets Schedule 12: ` 14996.75 crore

Current Liabilities Schedule 13: ` 30017.59 crore

The above included ` 5547.53 crore representing ‘Terrorism Pool (TP) Assets’ and ‘Terrorism Pool (TP) Liabilities’ under Current Assets and Current Liabilities of the Company respectively. The Company is only a Manager to the Indian Market Terrorism Risk Insurance Pool and the TP Assets and the TP Liabilities do not belong to the Company, except to the extent of GIC’s share which is separately reflected in the financial statements. The inclusion of entire TP Assets and TP Liabilities under the head Current Assets and Current Liabilities respectively has resulted in the overstatement of both Current Assets and Current Liabilities by ` 5547.53 crore.

For and on the be half of the Comptroller and Auditor General of India

(Roop Rashi) Place : Mumbai Principal Director of Commercial Audit and Dated : 16th September 2016 Ex-officio Member, Audit Board-I, Mumbai

78 ANNUAL REPORT 2015-2016 Management Reply to the Comments of the Comptroller & Auditor General of India

Reply to the Comments of the Comptroller & Auditor General of India under Section 143 (6) (b) of the Companies Act, 2013 on the Financial Statements of General Insurance Corporation of India for the year ended 31 March 2016:

After the WTC terrorist attack in September 2001, the availability of reinsurance protection for Terrorism risk had become very scarce. The Terrorism pool was therefore set up in India w.e.f. 01.04.2002 for writing Terrorism Business in India with GIC Re as the Pool Manager. Since then, GIC Re continues to successfully administer the Pool. Apart from its role as Pool Manager, GIC Re also contributes capacity to the Pool and participates as a reinsurer on the Pool’s excess of loss reinsurance protection.

In the capacity of the Pool administrator, Corporation is having full control over entire assets and liabilities of the Terrorism Pool. As the Pool is only a market arrangement, the funds of the Pool are centrally managed and invested by GIC Re with the agreement of the Pool members, as decided by Underwriting/Investment Committee of the Pool, from time to time.

A statement indicating the member-wise share of the Terrorism Pool funds is sent to the individual Pool members on quarterly basis. At the end of every financial year, the Terrorism Pool Assets Account is prepared and placed before the Terrorism Risk Insurance Pool Members for their confirmation and approval.

The reasons for showing these funds in GIC Re books of accounts can be summarized as follows:

1. It is necessary that the liability of the Pool is protected by adequate reinsurance coverage, in view of the probability of a huge loss due to terrorist activities. Securing a reinsurance protection for Terrorism Pool on standalone basis may be very expensive and challenging for GIC Re as Pool Manager.

2. By showing the Terrorism Pool Assets and Liabilities in GIC Re books of accounts, the Corporation is able to buy reinsurance protection on behalf of the Pool at most competitive rates from the International Market. This is possible on account of GIC Re’s standing in the international market compounded with the financial strength and managerial capacity of GIC Re which is recognized by the Reinsurers worldwide.

3. Further, during statutory and CAG audit of GIC Re Accounts, the matter had been discussed several times with the Auditors and with their cognizance, Corporation has consistently continued with the practice of showing the terrorism pool assets and liabilities in GIC Re books of accounts since the inception of the Pool w.e.f. 01.04.2002.

4. The effect of the Pool funds is nullified in GIC Re books of accounts as the amount of Assets and Liabilities of the Pool is always identical. Further, the assets and liabilities of the Terrorism Pool are not considered for calculation of Solvency Margin, Analytical Ratios etc.

Nevertheless, in view of the latest comments by CAG on this issue, Corporation will examine the matter and initiate consultation and due deliberations with Members of the Pool, Statutory Auditors and other appropriate Authorities etc. Thereafter, GIC Re will accordingly take necessary action in this regard, while finalizing the annual accounts of the Corporation for the year ended 31 March 2017.

Alice G. Vaidyan Chairman-cum-Managing Director

ANNUAL REPORT 2015-2016 79 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF FIRE INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 45039 525 39687 111 2. Profit on sale of Investments (Net) 3440 734 4635 672 3. Forex Gain/( Loss) 491 493 (206 797) 4. Interest, Dividend & Rent - Gross 5689 979 6214 343 Total (A) 54661 731 50330 329 1. Claims Incurred (Net) 2 34492 171 26538 919 2. Commission (Net) 3 12386 938 9658 600 3. Operating Expenses related to Insurance Business 4 681 359 544 148 4. Expenses relating to Investments 7 273 8 238 5. Premium Deficiency 0 0 Total (B) 47567 741 36749 905 Operating Profit/- Loss from Fire Business C = (A-B) 7093 990 13580 424 APPROPRIATIONS Transfer to Shareholders’ Account 7093 990 13580 424 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 7093 990 13580 424 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Fire Insurance Business have been fully debited in the Fire Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account. As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

80 ANNUAL REPORT 2015-2016 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF MISCELLANEOUS INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 94878 040 85256 515 2. Profit on sale of Investments (Net) 6092 484 7203 607 3. Forex Gain/( Loss) 915 231 (317 788) 4. Interest, Dividend & Rent - Gross 10075 205 9656 784 Total (A) 111960 960 101799 118 1. Claims Incurred (Net) 2 86478 471 81526 948 2. Commission (Net) 3 20627 929 16123 033 3. Operating Expenses related to Insurance Business 4 1029 407 947 232 4. Expenses relating to Investments 12 879 12 802 5. Premium Deficiency 0 0 Total (B) 108148 686 98610 015 Operating Profit/-Loss from Miscellaneous Business C = (A-B) 3812 274 3189 103 APPROPRIATIONS Transfer to Shareholders’ Account 3812 274 3189 103 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 3812 274 3189 103 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Miscellaneous Insurance Business have been fully debited in the Miscellaneous Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account.

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 81 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF MARINE INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 9435 249 9334 589 2. Profit on sale of Investments (Net) 989 018 1042 955 3. Forex Gain/( Loss) 151 896 (57 147) 4. Interest, Dividend & Rent - Gross 1635 550 1398 132 Total (A) 12211 713 11718 529 1. Claims Incurred (Net) 2 6327 997 9919 185 2. Commission (Net) 3 1812 301 1983 459 3. Operating Expenses related to Insurance Business 4 74 575 86 927 4. Expenses relating to Investments 2 091 1 853 5. Premium Deficiency -584 596 584 596 Total (B) 7632 368 12576 020 Operating Profit/-Loss from Marine Business C = (A-B) 4579 345 -857 491 APPROPRIATIONS Transfer to Shareholders’ Account 4579 345 -857 491 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 4579 345 -857 491 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Marine Insurance Business have been fully debited in the Marine Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account.

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

82 ANNUAL REPORT 2015-2016 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF LIFE INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 2375 574 1304 308 2. Profit on sale of Investments (Net) 47 713 51 120 3. Forex Gain/( Loss) 7 082 (2 588) 4. Interest, Dividend & Rent - Gross 78 904 68 529 Total (A) 2509 273 1421 369 1. Claims Incurred (Net) 2 1699 960 932 666 2. Commission (Net) 3 76 403 77 432 3. Operating Expenses related to Insurance Business 4 21 633 16 049 4. Expenses relating to Investments 101 91 5. Premium Deficiency 0 0 Total (B) 1798 097 1026 238 Operating Profit/-Loss from Life Business C = (A-B) 711 176 395 131 APPROPRIATIONS Transfer to Shareholders’ Account 711 176 395 131 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 711 176 395 131 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Life Insurance Business have been fully debited in the Life Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account. As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

ANNUAL REPORT 2015-2016 83 Profit & Loss Account

Registration No. 112 Date of Registration with IRDAI : 2nd April, 2001 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000) 1. Operating Profit/-Loss (a) Fire Insurance 7093 990 13580 424 (b) Marine Insurance 4579 345 (857 491) (c) Miscellaneous Insurance 3812 274 3189 103 (d) Life Insurance 711 176 395 131 2. Income from Investments (a) Interest, Dividend & Rent - Gross 8411 453 7036 980 (b) Profit on sale of Investments 5086 412 5249 329 Less: Loss on sale of Investment 0 0 3. Other Income: Forex Gain/( Loss) 754 983 (275 131) Interest on Income-tax Refund 0 2327 674 (Provision)/Doubtful Debts written back 1578 527 (1075 122) Miscellaneous Receipts 11 949 9 208 Total (A) 32040 109 29580 105 4. Provision for Doubtful Loans & Investment 420 091 32 008 6 Amortisation of premium on Investments 185 605 181 025 7 Diminution in the value of investments written off 1359 916 588 077 8 Other Expenses : Expenses relating to Investments 10 752 9 329 (Profit)/Loss on sale of Assets (Net) 223 ( 167) Sundry Balances Written off (Net) 0 0 Interest Motor Pool & Others 7 519 318 005 Corporate Social Responsibility Expenses 490 936 179 481 Total (B) 2475 042 1307 758 Profit Before Tax 29565 067 28272 347 Provision for Taxation : Current Tax 5122 682 5070 000 Wealth Tax 0 11 359 MAT Credit -1884 959 -3653 300 Deferred Tax 150 425 -107 630 Provision for Tax in respect of earlier years -101 341 14 713 MAT Credit of earlier year -2205 632 0 Profit After Tax 28483 892 26937 205 Appropriations (a) Balance brought forward from last year 769 896 (b) Proposed Final dividend 8600 000 5400 000 (c) Dividend distribution tax 1750 788 1099 332 (d) Transfer to General Reserve 18133 000 20438 000 Balance carried forward to Balance Sheet 874 769 Basic and Diluted EPS (note no. 36) 6.62 6.26 As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Firm Regn No. 103142W Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 109043W Director Director YOGESH R. AMAL Partner ADHAR SAMRIA G C Gaylong D R Waghela Membership No.: 111636 Partner Director & GM GM Finance Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

84 ANNUAL REPORT 2015-2016 Balance Sheet

Registration No. 112 Date of Registration with IRDAI : 2nd April, 2001 BALANCE SHEET AS AT 31st MARCH 2016

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

SOURCES OF FUNDS Share Capital 5 4300 000 4300 000 Reserves and Surplus 6 154018 207 133636 500 Borrowings 7 0 0 Deferred Tax Liability 0 0 Fair Value Change Account 234507 331 281468 452 Total 392825 538 419404 952 APPLICATION OF FUNDS Investments 8 & 8A 544359 624 557250 626 Loans 9 3657 759 3938 449 Fixed Assets 10 1702 666 1376 270 Deferred Tax Asset 24 268 174 705 Current Assets: Cash and Bank Balances 11 97614 005 77280 874 Advances and Other Assets 12 149967 476 141951 874 Sub-Total (A) 247581 481 219232 748 Current Liabilities 13 300175 919 273015 607 Provisions 14 104324 341 89552 239 Sub-Total (B) 404500 260 362567 846 Net Current Assets (C)=(A-B) -156918 779 -143335 098 Miscellaneous Expenditure 15 0 0 Total 392825 538 419404 952 CONTINGENT LIABILITIES 27645 157 30860 684 Schedules referred to above form integral part of the Balance Sheet.

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 85 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

A FIRE INSURANCE Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 64761 247 47016 449 Less: Premium on Reinsurance ceded 13454 793 7616 664 Net Premium 51306 454 39399 785 Adjustment for change in reserve for unexpired risks -6266 929 287 326 Total Premium Earned (Net) 45039 525 39687 111 B MISCELLANEOUS INSURANCE (1) MOTOR Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 44882 912 38522 946 Less: Premium on Reinsurance ceded 0 0 Net Premium 44882 912 38522 946 Adjustment for change in reserve for unexpired risks -3414 131 -2032 288 Total Premium Earned (Net) 41468 781 36490 658 (2) AVIATION Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 4531 748 6863 948 Less: Premium on Reinsurance ceded 974 129 961 890 Net Premium 3557 619 5902 058 Adjustment for change in reserve for unexpired risks 1148 004 -1179 865 Total Premium Earned (Net) 4705 623 4722 193 (3) ENGINEERING Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 8906 026 7958 220 Less: Premium on Reinsurance ceded 1245 459 854 396 Net Premium 7660 567 7103 824 Adjustment for change in reserve for unexpired risks -310 661 281 556 Total Premium Earned (Net) 7349 906 7385 380

86 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(4) WORKMENS’ COMPENSATION Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 253 526 182 702 Less: Premium on Reinsurance ceded 0 0 Net Premium 253 526 182 702 Adjustment for change in reserve for unexpired risks -35 433 30 085 Total Premium Earned (Net) 218 093 212 787 (5) LIABILITY Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 1505 296 1153 477 Less: Premium on Reinsurance ceded 89 047 116 619 Net Premium 1416 249 1036 858 Adjustment for change in reserve for unexpired risks -190 201 -80 778 Total Premium Earned (Net) 1226 048 956 080 (6) PERSONAL ACCIDENT Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 3805 190 2691 267 Less: Premium on Reinsurance ceded 5 142 11 685 Net Premium 3800 048 2679 582 Adjustment for change in reserve for unexpired risks -575 996 559 125 Total Premium Earned (Net) 3224 052 3238 707 (7) HEALTH Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 25041 895 21049 810 Less: Premium on Reinsurance ceded 0 0 Net Premium 25041 895 21049 810 Adjustment for change in reserve for unexpired risks -1990 028 -2383 824 Total Premium Earned (Net) 23051 867 18665 986

ANNUAL REPORT 2015-2016 87 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(8) OTHER MISCELLANEOUS Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 16463 329 12349 017 Less: Premium on Reinsurance ceded 2381 912 1772 572 Net Premium 14081 417 10576 445 Adjustment for change in reserve for unexpired risks -1833 002 1007 847 Total Premium Earned (Net) 12248 415 11584 292 (9) FINANCIAL LIABILTY/CREDIT Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 1766 695 1455 353 Less: Premium on Reinsurance ceded 450 000 0 Net Premium 1316 695 1455 353 Adjustment for change in reserve for unexpired risks 68 560 545 079 Total Premium Earned (Net) 1385 255 2000 432 TOTAL MISCELLANEOUS Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 107156 617 92226 740 Less: Premium on Reinsurance ceded 5145 689 3717 162 Net Premium 102010 928 88509 578 Adjustment for change in reserve for unexpired risks -7132 888 -3253 063 Total Premium Earned (Net) 94878 040 85256 515 C MARINE INSURANCE (1) MARINE CARGO Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 3377 551 3806 211 Less: Premium on Reinsurance ceded 380 402 277 104 Net Premium 2997 149 3529 107 Adjustment for change in reserve for unexpired risks 520 118 228 826 Total Premium Earned (Net) 3517 267 3757 933

88 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(2) MARINE HULL Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 6756 228 7217 036 Less: Premium on Reinsurance ceded 1225 493 1282 284 Net Premium 5530 735 5934 752 Adjustment for change in reserve for unexpired risks 387 247 -358 096 Total Premium Earned (Net) 5917 982 5576 656 TOTAL MARINE Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 10133 779 11023 247 Less: Premium on Reinsurance ceded 1605 895 1559 388 Net Premium 8527 884 9463 859 Adjustment for change in reserve for unexpired risks 907 365 -129 270 Total Premium Earned (Net) 9435 249 9334 589 D LIFE INSURANCE Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 2306 478 1573 224 Less: Premium on Reinsurance ceded 403 897 376 312 Net Premium 1902 581 1196 912 Adjustment for change in reserve for unexpired risks 472 993 107 396 Total Premium Earned (Net) 2375 574 1304 308 E TOTAL ALL CLASSES Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 184358 121 151839 660 Less: Premium on Reinsurance ceded 20610 274 13269 526 Net Premium 163747 847 138570 134 Adjustment for change in reserve for unexpired risks -12019 459 -2987 611 Total Premium Earned (Net) 151728 388 135582 523

ANNUAL REPORT 2015-2016 89 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

A FIRE INSURANCE Claims Paid Direct 0 0 Add: Reinsurance accepted 38282 764 36728 178 Less: Reinsurance ceded 9209 430 1563 411 Net Claims Paid 29073 334 35164 767 Add: Claims Outstanding at the end of the year 73001 061 67582 224 Less: Claims Outstanding at the beginning of the year 67582 224 76208 072 Total Claims Incurred 34492 171 26538 919 B MISCELLANEOUS INSURANCE (1) MOTOR Claims Paid Direct 0 0 Add: Reinsurance accepted 29418 461 41344 945 Less: Reinsurance ceded 0 0 Net Claims Paid 29418 461 41344 945 Add: Claims Outstanding at the end of the year 61161 102 51587 884 Less: Claims Outstanding at the beginning of the year 51587 884 54058 415 Total Claims Incurred 38991 679 38874 414 (2) AVIATION Claims Paid Direct -11 700 4 057 Add: Reinsurance accepted 3901 682 3324 259 Less: Reinsurance ceded 332 185 143 556 Net Claims Paid 3557 797 3184 760 Add: Claims Outstanding at the end of the year 8550 135 8803 936 Less: Claims Outstanding at the beginning of the year 8803 936 7900 822 Total Claims Incurred 3303 996 4087 874

90 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(3) ENGINEERING Claims Paid Direct 0 0 Add: Reinsurance accepted 4392 151 3889 855 Less: Reinsurance ceded 164 800 17 234 Net Claims Paid 4227 351 3872 621 Add: Claims Outstanding at the end of the year 16497 841 18382 485 Less: Claims Outstanding at the beginning of the year 18382 485 17748 578 Total Claims Incurred 2342 707 4506 528 (4) WORKMENS’ COMPENSATION Claims Paid Direct 0 0 Add: Reinsurance accepted 89 996 79 206 Less: Reinsurance ceded 0 0 Net Claims Paid 89 996 79 206 Add: Claims Outstanding at the end of the year 210 187 161 463 Less: Claims Outstanding at the beginning of the year 161 463 163 235 Total Claims Incurred 138 720 77 434 (5) LIABILITY Claims Paid Direct 0 0 Add: Reinsurance accepted 436 967 243 887 Less: Reinsurance ceded 0 38 252 Net Claims Paid 436 967 205 635 Add: Claims Outstanding at the end of the year 1726 140 1579 545 Less: Claims Outstanding at the beginning of the year 1579 545 1842 666 Total Claims Incurred 583 562 -57 486

ANNUAL REPORT 2015-2016 91 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(6) PERSONAL ACCIDENT Claims Paid Direct 0 0 Add: Reinsurance accepted 1443 703 2586 724 Less: Reinsurance ceded 0 0 Net Claims Paid 1443 703 2586 724 Add: Claims Outstanding at the end of the year 2015 981 1888 768 Less: Claims Outstanding at the beginning of the year 1888 768 2406 549 Total Claims Incurred 1570 916 2068 943 (7) HEALTH Claims Paid Direct 0 0 Add: Reinsurance accepted 21544 530 17748 458 Less: Reinsurance ceded 0 0 Net Claims Paid 21544 530 17748 458 Add: Claims Outstanding at the end of the year 12428 273 12700 829 Less: Claims Outstanding at the beginning of the year 12700 829 9158 105 Total Claims Incurred 21271 974 21291 182 (8) OTHER MISCELLANEOUS Claims Paid Direct 0 0 Add: Reinsurance accepted 16887 122 9320 071 Less: Reinsurance ceded 1049 991 0 Net Claims Paid 15837 131 9320 071 Add: Claims Outstanding at the end of the year 9924 875 9707 154 Less: Claims Outstanding at the beginning of the year 9707 154 10337 916 Total Claims Incurred 16054 852 8689 309

92 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000) (9) FINANCIAL LIABILTY/CREDIT Claims Paid Direct 0 0 Add: Reinsurance accepted 1995 532 1225 730 Less: Reinsurance ceded 0 0 Net Claims Paid 1995 532 1225 730 Add: Claims Outstanding at the end of the year 6872 775 6648 242 Less: Claims Outstanding at the beginning of the year 6648 242 5885 222 Total Claims Incurred 2220 065 1988 750 TOTAL MISCELLANEOUS Claims Paid Direct -11 700 4 057 Add: Reinsurance accepted 80110 144 79763 135 Less: Reinsurance ceded 1546 976 199 042 Net Claims Paid 78551 468 79568 150 Add: Claims Outstanding at the end of the year 119387 309 111460 306 Less: Claims Outstanding at the beginning of the year 111460 306 109501 508 Total Claims Incurred 86478 471 81526 948 C MARINE INSURANCE (1) MARINE CARGO Claims Paid Direct 0 0 Add: Reinsurance accepted 1863 470 3274 157 Less: Reinsurance ceded 51 005 62 823 Net Claims Paid 1812 465 3211 334 Add: Claims Outstanding at the end of the year 5899 043 5556 870 Less: Claims Outstanding at the beginning of the year 5556 870 5225 659 Total Claims Incurred 2154 638 3542 545

ANNUAL REPORT 2015-2016 93 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(2) MARINE HULL Claims Paid Direct 0 0 Add: Reinsurance accepted 4630 060 4242 795 Less: Reinsurance ceded 516 246 309 043 Net Claims Paid 4113 814 3933 752 Add: Claims Outstanding at the end of the year 9740 973 9681 428 Less: Claims Outstanding at the beginning of the year 9681 428 7238 540 Total Claims Incurred 4173 359 6376 640 TOTAL MARINE Claims Paid Direct 0 0 Add: Reinsurance accepted 6493 530 7516 952 Less: Reinsurance ceded 567 251 371 866 Net Claims Paid 5926 279 7145 086 Add: Claims Outstanding at the end of the year 15640 016 15238 298 Less: Claims Outstanding at the beginning of the year 15238 298 12464 199 Total Claims Incurred 6327 997 9919 185 D LIFE INSURANCE Claims Paid Direct 0 0 Add: Reinsurance accepted 1802 156 995 129 Less: Reinsurance ceded 295 481 321 318 Net Claims Paid 1506 675 673 811 Add: Claims Outstanding at the end of the year 1047 227 853 942 Less: Claims Outstanding at the beginning of the year 853 942 595 087 Total Claims Incurred 1699 960 932 666 E TOTAL ALL CLASSES Claims Paid Direct -11 700 4 057 Add: Reinsurance accepted 126688 594 125003 394 Less: Reinsurance ceded 11619 138 2455 637 Net Claims Paid 115057 756 122551 814 Add: Claims Outstanding at the end of the year 209075 613 195134 770 Less: Claims Outstanding at the beginning of the year 195134 770 198768 866 Total Claims Incurred 128998 599 118917 718

94 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

A FIRE INSURANCE Commission Paid Direct 0 0 Add: Reinsurance Accepted 12683 791 9831 772 Less: Commission on Reinsurance Ceded 296 853 173 172 Net Commission 12386 938 9658 600 Break-up of Commission Brokerage 2406 921 1359 923 Commision Paid 9980 016 8298 677 Total Commission 12386 937 9658 600 B MISCELLANEOUS INSURANCE (1) MOTOR Commission Paid Direct 0 0 Add: Reinsurance Accepted 8218 799 6499 826 Less: Commission on Reinsurance Ceded 0 0 Net Commission 8218 799 6499 826 Break-up of Commission Brokerage 341 300 252 380 Commision Paid 7877 499 6247 446 Total Commission 8218 799 6499 826 (2) AVIATION Commission Paid Direct 0 -78 261 Add: Reinsurance Accepted 731 955 955 853 Less: Commission on Reinsurance Ceded 24 799 583 Net Commission 707 156 877 009 Break-up of Commission Brokerage 343 032 373 701 Commision Paid 364 124 503 308 Total Commission 707 156 877 009

ANNUAL REPORT 2015-2016 95 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(3) ENGINEERING Commission Paid Direct 0 0 Add: Reinsurance Accepted 2044 958 1971 232 Less: Commission on Reinsurance Ceded 15 676 3 506 Net Commission 2029 282 1967 726 Break-up of Commission Brokerage 129 162 92 753 Commision Paid 1900 120 1874 973 Total Commission 2029 282 1967 726 (4) WORKMENS’ COMPENSATION Commission Paid Direct 0 0 Add: Reinsurance Accepted 37 785 27 023 Less: Commission on Reinsurance Ceded 0 0 Net Commission 37 785 27 023 Break-up of Commission Brokerage 1 642 1 619 Commision Paid 36 143 25 404 Total Commission 37 785 27 023 (5) LIABILITY Commission Paid Direct 0 0 Add: Reinsurance Accepted 206 293 190 262 Less: Commission on Reinsurance Ceded 0 2 094 Net Commission 206 293 188 168 Break-up of Commission Brokerage 22 141 15 511 Commision Paid 184 152 172 657 Total Commission 206 293 188 168

96 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(6) PERSONAL ACCIDENT Commission Paid Direct 0 0 Add: Reinsurance Accepted 1350 952 561 284 Less: Commission on Reinsurance Ceded 26 1 580 Net Commission 1350 926 559 704 Break-up of Commission Brokerage 47 068 44 091 Commision Paid 1303 858 515 613 Total Commission 1350 926 559 704 (7) HEALTH Commission Paid Direct 0 0 Add: Reinsurance Accepted 5150 064 3699 443 Less: Commission on Reinsurance Ceded 0 0 Net Commission 5150 064 3699 443 Break-up of Commission Brokerage 162 692 264 056 Commision Paid 4987 372 3435 387 Total Commission 5150 064 3699 443 (8) OTHER MISCELLANEOUS Commission Paid Direct 0 0 Add: Reinsurance Accepted 2623 949 2050 405 Less: Commission on Reinsurance Ceded 1 065 1 478 Net Commission 2622 884 2048 927 Break-up of Commission Brokerage 121 131 94 832 Commision Paid 2501 753 1954 095 Total Commission 2622 884 2048 927

ANNUAL REPORT 2015-2016 97 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(9) FINANCIAL LIABILTY/CREDIT Commission Paid Direct 0 0 Add: Reinsurance Accepted 304 740 255 207 Less: Commission on Reinsurance Ceded 0 0 Net Commission 304 740 255 207 Break-up of Commission Brokerage 4 813 2 267 Commision Paid 299 927 252 940 Total Commission 304 740 255 207 TOTAL MISCELLANEOUS Commission Paid Direct 0 -78 261 Add: Reinsurance Accepted 20669 495 16210 535 Less: Commission on Reinsurance Ceded 41 566 9 241 Net Commission 20627 929 16123 033 Break-up of Commission Brokerage 1172 981 1141 210 Commision Paid 19454 948 14981 823 Total Commission 20627 929 16123 033 C MARINE INSURANCE (1) MARINE CARGO Commission Paid Direct 0 0 Add: Reinsurance Accepted 707 360 895 008 Less: Commission on Reinsurance Ceded 0 34 Net Commission 707 360 894 974 Break-up of Commission Brokerage 87 698 74 699 Commision Paid 619 662 820 275 Total Commission 707 360 894 974

98 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000) (2) MARINE HULL Commission Paid Direct 0 0 Add: Reinsurance Accepted 1222 828 1166 143 Less: Commission on Reinsurance Ceded 117 886 77 658 Net Commission 1104 942 1088 485 Break-up of Commission Brokerage 363 841 257 020 Commision Paid 741 101 831 465 Total Commission 1104 942 1088 485 TOTAL MARINE Commission Paid Direct 0 0 Add: Reinsurance Accepted 1930 188 2061 151 Less: Commission on Reinsurance Ceded 117 886 77 692 Net Commission 1812 302 1983 459 Break-up of Commission Brokerage 451 539 331 719 Commision Paid 1360 763 1651 740 Total Commission 1812 302 1983 459 D LIFE INSURANCE Commission Paid Direct 0 0 Add: Reinsurance Accepted 76 403 77 432 Less: Commission on Reinsurance Ceded 0 0 Net Commission 76 403 77 432 Break-up of Commission Brokerage 17 850 10 531 Commision Paid 58 553 66 901 Total Commission 76 403 77 432 E TOTAL ALL CLASSES Commission Paid Direct 0 -78 261 Add: Reinsurance Accepted 35359 877 28180 890 Less: Commission on Reinsurance Ceded 456 305 260 105 Net Commission 34903 572 27842 524 Break-up of Commission Brokerage 4049 291 2843 383 Commission Paid 30854 280 24999 141 Total Commission 34903 571 27842 524

ANNUAL REPORT 2015-2016 99 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 4 OPERATING EXPENSES RELATED TO INSURANCE BUSINESS

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 Employees’ remuneration & welfare benefits 859 963 686 241 2 Travel, conveyance and vehicle running expenses 89 762 69 198 3 Training expenses 23 425 9 879 4 Rents, rates and taxes 60 272 39 683 5 Repairs 212 637 211 324 6 Printing & stationery 2 735 2 643 7 Communication 12 338 11 660 8 Legal & professional charges 50 940 134 334 9 Auditors’ fees, expenses etc. (a) as auditor 8 239 7 081 (b) as advisor or in any other capacity, in respect of (i) Taxation matters 300 300 (ii) Others 2 5 10 Advertisement and publicity 54 412 48 847 11 Interest & Bank Charges 11 734 7 890 12 Others 198 600 172 472 13 Depreciation 95 789 92 463 14 Service Tax A/c 4 557 5 131 15 IT Expenses 121 269 95 205 Total 1806 974 1594 356

100 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 5 SHARE CAPITAL

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Authorised Capital 10,00,00,00,000 Equity Shares of ` 1/- Each 10000 000 10000 000 2 Issued & Subscribed Capital 4,30,00,00,000 Equity Shares of ` 1/- Each 4300 000 4300 000 3 Called-up Capital 4,30,00,00,000 Equity Shares of ` 1/- Each 4300 000 4300 000 (Includes 4,06,00,00,000 shares of ` 1/- issued by capitalisation of Capital Redemption Reserve and General Reserve and 5,00,00,000 partly paid shares (` 0.50 per share paid) made fully paid-up shares by capitalisation of General Reserve) Total 4300 000 4300 000

SCHEDULE 5A SHARE CAPITAL PATTERN OF SHAREHOLDING [As certified by the Management]

Shareholders Current Year Previous Year Number of Shares % of Holding Number of Shares % of Holding Promoters Indian 4,30,00,00,000 100% 4,30,00,00,000 100% The Shareholders of the corporation have approved the sub-division of each equity share having face value of `100/ - into 100 equity shares having face value of ` 1 each. All shares and per share information in the financial results reflect the effect of sub-division for each of the period presented. SCHEDULE 6 RESERVES AND SURPLUS

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 General Reserve Opening Balance 125890 000 105452 000 Add: Transfer from Profit & Loss A/c 18133 000 20438 000 144023 000 125890 000 2 Catastrophe Reserve 0 0 3 Foreign Currency Translation Reserve 9994 333 7745 731 4 Balance of Profit in Profit & Loss Account 874 769 Total 154018 207 133636 500 SCHEDULE 7 BORROWINGS

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ANNUAL REPORT 2015-2016 101 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 8 INVESTMENTS - SHAREHOLDERS’ FUND

Particulars Current Year Previous Year (` ‘000) (` ‘000) Long Term Investments 1 Government securities and Government guaranteed 37039 988 29879 607 bonds including Treasury Bills 2 Other Approved Securities 1088 215 1160 091 3 Other Investments (a) Shares (aa) Equity - Indian 94491 125 95915 057 Equity - Foreign 569 499 569 499 (bb) Preference 12 897 11 523 (b) Mutual Funds 0 0 (c) Derivative Instruments 0 0 (d) Debentures/Bonds Indian 8021 383 6019 815 Debentures/Bonds Foreign 0 0 (e) Other Securities Guaranteed Equity 162 144 (f) Subsidiaries 734 593 734 591 (e) Associates - Indian 0 0 Associates - Foreign 159 479 159 479 4 Investments in Infrastructure and Social Sector (a) Equity 4510 029 4586 044 (b) Debentures/Bonds 17827 480 10679 309 5 Other than Approved Investments (a) Equity/Preference/Debentures/Venture Funds 1609 749 1176 154 (b) Preference 9 540 8 508 (c) Debentures/Bond 2871 379 5886 076 (d) Venture Funds 602 726 512 372 (e) Associate Indian 700 000 700 000 Short Term Investments 1 Government securities and Government guaranteed 2972 264 814 669 bonds including Treasury Bills 2 Other Approved Securities 203 949 111 719 3 Other Investments (a) Shares (aa) Equity 0 0 (bb) Preference 0 0 (b) Mutual Funds 929 728 528 523 (c) Derivative Instruments 0 0 (d) Debentures/Bond Indian 1133 904 764 367 Debentures/Bond Foreign 0 0 (e) Other Securities 0 0 Commercial Paper 0 0 (f) Subsidiaries 0 0 (g) Associates - Indian 0 0 Associates - Foreign 0 0 4 Investments in Infrastructure and Social Sector (a) Debentures/Bond 2094 775 1617 867 5 Other than Approved Investments (a) Preference Shares 0 0 (b) Debentures/Bond 740 204 581 788 (c) Mutual Funds 0 0 Total 178323 068 162417 202

102 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 8 A INVESTMENTS - POLICYHOLDERS’ FUND

Particulars Current Year Previous Year (` ‘000) (` ‘000) Long Term Investments 1 Government securities and Government guaranteed 76964 284 73617 473 bonds including Treasury Bills 2 Other Approved Securities 2261 170 2838 297 3 Other Investments (a) Shares (aa) Equity - Indian 196340 285 236315 830 Equity - Foreign 0 0 (bb) Preference 26 799 28 390 (b) Mutual Funds 0 0 (c) Derivative Instruments 0 0 (d) Debentures/Bonds Indian 16667 392 14831 640 Debentures/Bonds Foreign 0 0 (e) Other Securities Guaranteed Equity 338 356 (f) Subsidiaries 0 0 (g) Associates - Indian 0 0 Associates - Foreign 0 0 4 Investments in Infrastructure and Social Sector (a) Equity 9371 255 11299 110 (b) Debentures/Bonds 37043 188 26311 716 5 Other than Approved Investments (a) Equity/Preference/Debentures/Venture Funds 3344 850 2897 813 (b) Preference 19 822 20 961 (c) Debentures/Bond 5966 353 14502 134 (d) Venture Funds 1252 386 1262 383 (e) Associate Indian 0 0 Short Term Investments 1 Government securities and Government guaranteed 6175 978 2007 185 bonds including Treasury Bills 2 Other Approved Securities 423 779 295 192 3 Other Investments (a) Shares (aa) Equity 0 0 (bb) Preference 0 0 (b) Mutual Funds 1931 854 1302 178 (c) Derivative Instruments 0 0 (d) Debentures/Bond Indian 2356 106 1883 249 Debentures/Bond Foreign 0 0 (e) Other Securities 0 0 Commercial Paper 0 0 (f) Subsidiaries 0 0 (g) Associates - Indian 0 0 Associates - Foreign 0 0 4 Investments in Infrastructure and Social Sector (a) Debentures/Bond 4352 670 3986 106 5 Other Investments (a) Preference Shares 0 0 (b) Debentures/Bond 1538 047 1433 411 (c) Mutual Funds 0 0 Total 366036 556 394833 424

ANNUAL REPORT 2015-2016 103 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 9 LOANS

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 Security-wise Classification Secured (a) On mortgage of property (aa) In India * 735 423 757 974 (bb) Outside India 0 0 (b) On Shares, Bonds, Government Securities 0 0 (c) Investments In State Govt. Loans for Housing and Fire fighting 2853 949 3112 087 Unsecured 68 387 68 388 Total 3657 759 3938 449 2 Borrower-Wise Classification (a) Central and State Governments 2853 949 3112 087 (b) Banks and Financial Institutions 0 0 (c) Subsidiaries 0 0 (d) Industrial Undertakings 782 984 816 556 (e) Others 20 826 9 806 Total 3657 759 3938 449 3 Performance-Wise Classification (a) Loans classified as standard (aa) In India 2955 623 3075 668 (bb) Outside India 0 0 (b) Non-performing loans less provisions (aa) In India 0 191 648 (bb) Outside India 0 0 Provisions ** 702 136 671 133 Total 3657 759 3938 449 4 Maturity-Wise Classification (a) Short - Term 296 986 331 193 (b) Long - Term 3360 773 3607 256 Total 3657 759 3938 449 ** Includes Provision for Bad and Doubtful Loans

104 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 10 FIXED ASSETS (` ‘000) Cost/Gross Block Depreciation Net Block Particulars As at Additions Deductions As at Upto Tweleve On Sales/ Upto As at As at 01.04.2015 31.03.2016 31.03.2015 months Adjust 31.03.2016 31.03.2016 31.03.2015 ended ment 31.03.2016

Leasehold Land 247 253 - - 247 253 85 851 3 434 - 89 285 157 968 161 402 Freehold Land 560 132 - - 560 132 - - - - 560 132 560 132 Buildings 611 494 393 222 1004 716 238 217 11 441 - 249 658 755 058 373 277 Furniture & Fittings 21 225 58 149 21 134 18 610 391 104 18 897 2 237 2 615 I.T. Equipments 121 459 5 678 578 126 559 105 102 7 701 530 112 273 14 286 16 357 I.T. Software 343 164 12 533 355 697 112 942 65 260 - 178 202 177 495 230 222 Vehicles 44 130 11 599 3 627 52 102 19 520 5 001 1 950 22 571 29 531 24 610 Office Equipments 17 279 724 32 17 971 10 761 2 383 43 13 101 4 870 6 518 AC & Water Coolers 12 523 185 22 12 686 11 694 110 7 11 797 889 829 Elevators 2 073 - - 2 073 2 073 - 2 073 - - Canteen Appliances 474 - - 474 363 31 - 394 80 111 Electrical Installation 11 769 25 1,796.00 9 998 11 572 37 1,731.00 9 878 120 197 Fire Alarm Systems 3 408 - - 3 408 3 408 - 3 408 - - Total 1996 383 424 024 6 204 2414 203 620 113 95 789 4 365 711 537 1702 666 1376 270 Previous years 1674 419 327 081 5 117 1996 383 531 316 92 463 3 666 620 113 The figures are inclusive of Appreciation/Depreciation due to foreign currency fluctuation

SCHEDULE 11 CASH AND BANK BALANCES

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Cash & stamps 79 164 2 Bank Balances (a) Deposit Accounts - Short term (due within 12 months) 85294 228 66651 121 (b) Current Accounts 4605 297 2397 761 3 Money at Call and Short Notice (a) With Bank 298 940 263 042 (b) With other Institutions 7415 461 7968 786 Total 97614 005 77280 874 Balances with non-scheduled banks Nil Nil

ANNUAL REPORT 2015-2016 105 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 12 ADVANCES AND OTHER ASSETS

Particulars Current Year Previous Year (` ‘000) (` ‘000) Advances 1 Reserve Deposits with Ceding Companies 29847 168 25570 338 2 Application Money for Investments 0 0 3 Prepayments 80 298 78 348 4 Advances to Directors/Officers 5 164 5 258 5 Advance Tax Paid and TDS 11864 950 12592 152 Less: Provision for Taxation 10264 986 6768 350 1599 964 5823 802 6 Service Tax & Others 2902 834 2392 388 7 Deferred Commission 554 705 473 178 Total (A) 34990 133 34343 312 Other Assets 1 Income accrued on investments 8267 277 7550 171 2 Due from other entities carrying on insurance 35225 913 36952 020 business (including reinsurers) * 3 Deposit U/S-7 of Insurance Act 0 295 314 4 Sundry Debtors 174 340 3394 901 5 Sundry Deposits 360 558 289 644 6 MAT Credit Entitlement 15045 407 10954 816 7 Service Tax Unutilised Credit 428 530 343 260 8 Terrorism Pool Assets 55475 318 47828 436 Total (B) 114977 343 107608 562 Total (A+B) 149967 476 141951 874 * Net of ` 23,56,666 thousand (PY ` 3,935,192 thousand) for provision for bad and doubtful debts

SCHEDULE 13 CURRENT LIABILITIES

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Balances Due to other insurance companies 16595 935 14850 027 2 Deposits held on re-insurance ceded 18336 851 14538 197 3 Sundry Creditors 692 202 664 177 4 Claims Outstanding 209075 613 195134 770 5 Terrorism Pool Liabilities 55475 318 47828 436 Total 300175 919 273015 607

106 ANNUAL REPORT 2015-2016 Schedules Forming Part of Financial Statements For the Year Ended 31st March 2016

SCHEDULE 14 PROVISIONS

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Reserve for Unexpired Risk 86483 331 74463 872 2 Reserve for Premium Deficiency 0 584 595 3 For proposed dividends 8600 000 5400 000 4 For dividend distribution tax 1750 788 1099 332 5 For Doubtful Loans, Investment and Debts 5313 238 6471 674 6 For Leave Encashment 245 182 227 340 7 Provision for Pension 93 972 31 109 8 Provision for Gratuity 33 473 75 675 9 Provision for Settlement 14 024 12 195 10 For Salary Arrears 0 130 000 11 For PLLI Arrears 0 16 800 12 Provision for Taxation 12355 436 14577 848 Less: Advance Tax Paid and TDS 10565 103 13538 201 1790 333 1039 647 Total 104324 341 89552 239

SCHEDULE 15 MISCELLANEOUS EXPENDITURE

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ANNUAL REPORT 2015-2016 107 Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES 2.3 Receivables AND NOTES FORMING PART OF THE ACCOUNTS Provisions for doubtful debts for receivables are I. SIGNIFICANT ACCOUNTING POLICIES: provided as under:- 1. ACCOUNTING CONVENTION (i) Companies in liquidation. The Balance Sheet, the Profit and Loss Account and (ii) Foreign Companies having non-moving the Revenue Accounts are drawn up in accordance balances over a period of three years. with the provisions of Section 11(1) of the Insurance (iii) Non realizable balances of foreign Act, 1938 and to comply with the Generally Accepted companies having moving balances. Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under 3. FOREIGN CURRENCY TRANSACTIONS: the relevant provisions of the Companies Act, 2013. Revenue transactions in foreign currencies are The financial statements also conform to the converted at the daily rate of exchange on the day stipulation specified under the Insurance Regulatory accounts are received and transactions are booked. and Development Authority (Preparation of The rates have been taken from Thomson Reuters Financial Statements and Auditors Report of India Pvt. Ltd. Insurance Companies) Regulations, 2002. The said 3.1 Non-Monetary items including fixed assets and statements are prepared on historical cost investments abroad are reported using the convention and on accrual basis except as otherwise exchange rate applicable on the date of stated and conform to the statutory provisions and acquisition. practices prevailing in the General Insurance Industry in India. 3.2 Monetary items such as receivables, payables and balances in bank accounts held in foreign 2. REINSURANCE BUSINESS currencies are converted using the closing rates 2.1 Reinsurance Revenues of exchange at the balance sheet date. Premium is accounted based on accounts 3.3 The exchange gain/loss relating to revenue rendered by ceding companies upon receipt of transaction, due to conversion of foreign accounts. At the year end, estimates are made currencies, is accounted for as revenue in for accounts not yet received, based on available respective revenue accounts. The common information and current trends. exchange gain/loss due to conversion are In respect of Indian Market Terrorism Risk apportioned between Revenue Account and Insurance pool and Indian Motor Declined Pool, Profit and Loss Account in same proportion as only the Corporation’s share of revenues is stated in Significant Accounting Policy No. 6. recorded as premium. 3.4 Foreign branch operations are considered as 2.2 Outstanding claims “non-integral business” as prescribed in AS11 “The effects of changes in foreign exchange 2.2.1 Estimated liability for outstanding claims in rates” (revised 2003) and translated accordingly. respect of Reinsurance business carried out in India is based on advices received as of different 4. RESERVE FOR UNEXPIRED RISK dates up to the date of finalization of accounts The URR provisions are made as under: and wherever such advices are not received, on 4.1 Non-Life Business: estimates based on available information, current trends, past underwriting experience of the (i) For HO, Dubai and Malaysia Branch: management and actuarial estimation bases. Reserve for Unexpired Risk in respect of Marine 2.2.2 Provision for claims incurred but not reported Insurance and Terrorism Risk Business (included (IBNR) is made as certified by the appointed in Fire and Engineering) is made at 100% of Net actuary. Premium, while for all other classes of insurance

108 ANNUAL REPORT 2015-2016 Significant Accounting Policies

is made at 50% of Net Premium of the period (iii) Investment Expenses : for which accounts are prepared. Expenses relating to investment are (ii) For London Branch: apportioned between Revenue and Profit & Loss Account in the same proportion as stated Reserve for Unexpired Risk is provided as per in Significant Accounting Policy No. 6. local practice. Further, any additional provision as required by IRDAI is provided at HO. 6. APPORTIONMENT OF INTEREST, DIVIDENDS AND RENTS 4.2 Life Business: The income from interest, dividends and rent is Reserve for Unexpired Risk is provided as apportioned between Profit and Loss Account and determined by Actuary. Revenue Accounts in the ratio of Shareholders’ Fund 5. OPERATING EXPENSES RELATING TO INSURANCE and Policyholders’ Fund respectively at the BUSINESS (EXPENSES OF MANAGEMENT) beginning of the year. The same is further 5.1 Depreciation apportioned amongst the revenue accounts on the basis of the respective Policyholders’ Fund at the Depreciation is provided on straight line beginning of the year. Shareholders’ fund consists method based on useful life of the assets of share capital and free reserves. Policyholders’ Fund as prescribed in Schedule II to the Companies consists of provisions for outstanding claims and Act, 2013 and residual value of the assets reserves for unexpired risks. shall be ` 1/-. 7. INVESTMENTS Depreciation is provided on pro-rata basis on additions to fixed assets and on assets sold/ 7.1 Prudential norms prescribed by Reserve Bank discarded/demolished/destroyed during the of India and the IRDAI are followed in regard to: year. (i) Revenue recognition, 5.2 Retirement Benefits to Employees (ii) Classification of assets into performing and Liabilities on account of retirement benefits to non-performing and the employees such as pension, gratuity and (iii) Provisioning against performing and leave encashment are provided for on accrual non-performing assets. basis, based on actuarial valuation and in 7.2 Purchases and Sales of shares, bonds, compliance with Accounting Standard 15. debentures and Government securities are 5.3 Apportionment of Expenses accounted for on the date of contracts. (i) Head office business : 7.3 The cost of investments includes premium on Operating expenses relating to insurance acquisition, Securities Transaction Tax and their business are apportioned to the Revenue related expenses Accounts on the basis of Reinsurance Premium 7.4 Short term money market instruments such as accepted during the period for which accounts Collateralized Borrowing and Lending are prepared, giving weightage of 75% for Operations (CBLO), Commercial Paper and Marine business & 100 % for Fire, Miscellaneous Treasury bill, which are discounted at the time & Life Reinsurance business. of contract at the agreed rate are accounted at (ii) Foreign business : their discounted value. Operating expenses relating to insurance 7.5 Investment portfolio in respect of equity shares business are also apportioned to the revenue are segregated into actively traded and thinly accounts of branches on the same basis as traded as prescribed by the IRDAI (Preparation mentioned in 5.3 (i) above. of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002.

ANNUAL REPORT 2015-2016 109 Significant Accounting Policies

7.6 (a) Investment in actively traded equity shares those companies which close their annual are required to be valued as per the guidelines accounts on dates other than 31st March), or of IRDA issued vide circular ref. no. IRDA/F&I/INV/ beyond 12 months (in case of those companies CIR/213/10/2013 dated October 30, 2013. The which close their annual accounts on 31st Corporation has chosen NSE as primary stock March), as on the date of Balance Sheet or exchange and BSE as secondary exchange. whose Net Worth has been fully impaired Accordingly, the valuation of equity shares is (negative Net Worth) are valued as under: made on the closing price of NSE. If such security a) Where shares are : Fair Value Change is not listed/not traded on NSE on closing day, Actively Traded Account at the closing price of BSE is considered. and Book Value is Market Value (b) Investment in units of mutual funds are less than valued at Fair value as per IRDAI guidelines Market Value 2003-04. Fair value for this purpose is the last Diminution in value of investments is quoted NAV in the month of March. recognized in the following cases : 7.7 a) Unrealized gains/losses arising due to b) Where shares are : Written down changes in the fair value of listed equity shares Actively Traded to Market Value and mutual fund units are taken under the head and Book Value is “Fair Value Change Account” and on realization greater than reported in Profit and Loss Account. Market Value b) Pending realization, the credit balance in the c) Thinly traded : Written down to “Fair Value Change Account” is not available for Equity Shares nominal value of ` 1/- distribution. per company c) Provision is made for diminution in value of d) Preference : At a value proportionate investments relating to thinly traded and Shares to the face value of the unlisted shares equivalent to the amount of equity shares that difference in average book cost and break-up bears to its market value of the shares except in companies where value and carrying cost de-merger has taken place during the Financial is reduced by the Year and latest audited accounts are not diminution value. available. 7.9 Investment in Subsidiary and Associate entities Breakup value is computed from the are valued at cost as these are strategic annual reports of companies not beyond investments. 21 months in case of those companies which close their annual accounts on dates other than 7.10 Final Dividend is accounted for as income in the 31st March or beyond 12 months in case of year of declaration and Interim dividend is those companies which close their accounts on accounted as income where the warrants are 31st March. dated 31st March or earlier. d) Provision is made for diminution in value of 7.11 Dividends/Interest on shares/debentures under investment relating to units of venture capital objection/pending deliveries is accounted for funds equivalent to the amount of difference on realization/payment. in book cost and the latest Net Asset Value 7.12 Profit or Loss on sale of investments is (NAV). apportioned between Profit and Loss Account 7.8 Investments in Equity and Preference shares of and Revenue Accounts in the ratio of companies whose latest available audited Shareholders’ Fund and Policyholders’ Fund accounts are beyond 21 months (in case of respectively at the beginning of the year. The

110 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

same are further apportioned amongst the 10. COMPLIANCE WITH ACCOUNTING STANDARDS revenue accounts on the basis of the respective The Corporation has complied with relevant Policyholders’ Fund at the beginning of the year. accounting standards prescribed by ICAI to the Shareholders’ fund consists of Share Capital and extent applicable and IRDA guidelines in preparation Free Reserves. Policyholders’ fund consists of of its financial statements. provisions for outstanding claims and reserves for unexpired risks. 11. PREMIUM DEFICIENCY: Profit/Loss on sale of investments is computed Premium deficiency is worked out separately for at average book value of investments on the each class of business such as fire, marine, date of sale. miscellaneous and life. Premium Deficiency is provided for where the incurred claim is higher than 7.13 Expenses relating to safe custody, straight the earned premium for any class of business. through processing and bank charges etc. on Premium deficiency is the difference between investments are charged to Profit and Loss incurred claim and earned premium. Account and Revenue Accounts as stated in Significant Accounting Policy No. 5.3. II. NOTES FORMING PART OF THE ACCOUNTS: 7.14 Debt securities including Government securities The Insurance Regulatory and Development and Redeemable Preference shares have been Authority of India (Preparation of Financial considered as ‘held to maturity’ securities and Statements and Auditors’ Report of Insurance have been measured at historical cost subject Companies) Regulations, 2002 have been adopted to amortization of premium paid over residual for presentation of the accounts. period. The call date has been considered as  Investments maturity date for amortization of Perpetual 1.(a)Out of Investment held in shares and Bonds. debentures of the value of ` 418,345,527 7.15 In case of repos transaction, difference between thousand (Previous Year 444,695,692 thousand) the selling and buying value is treated as no confirmations regarding actual custody or interest income. other documentary evidence for investments in debenture of the value of ` 1221 thousand 7.16 Income received from the Fixed Maturity Mutual (Previous year ` 1221 thousand) were available. fund (Dividend Option) is booked as dividend. (b) The number of equity shares actually held by 7.17 Investments are apportioned between the Corporation/Custodian of the Corporation Shareholders’ fund & Policyholders’ fund in the is in excess of number held as per the books of ratio of balance available in the respective funds the Corporation. The face value of such excess at the beginning of the year. is ` 712 thousand (Previous year ` 546 thousand). 8. FIXED ASSETS 2. The Fixed Maturity Mutual Fund Schemes are Fixed assets are stated at cost less depreciation. Cost close ended mutual fund schemes with definite of shares in Co-operative Societies/Companies for maturity date and with indicative returns. property rights acquired is included under the head 3.(a)Provision includes provision for standard ‘Buildings’ under Fixed Assets. assets @ 0.40% as per IRDAI-Prudential norms 9. AMORTIZATION OF PREMIUM AND PROVISION for Income recognition, Asset Classification FOR DOUBTFUL LOANS, INVESTMENTS AND and provisioning and other related methods DEBTS in respect of debt portfolio amounting to Amortization of premium, provision for doubtful ` 419,704 thousand (Previous Year ` 377,720 loans, doubtful debts and diminution in the value thousand). of investments written off, are recognized in the profit & loss account.

ANNUAL REPORT 2015-2016 111 Notes Forming Part of the Accounts

(b) During the year, the Corporation has 4. For valuation of actively traded equity shares, undertaken under CDR (Corporate Debt March 31, 2016 has been considered as closing Restructuring) System, following fresh cases of day. restructuring of corporate debt/loans etc., as 5. During the year, the corporation has waived/ under: written off of debts, loans and interest as follows: (` In thousand) Waiver during the year Sl. Particulars Current Previous (` In thousand) No Year Year Particulars No. of Write Waiver Total Amount of assets cases off subjected to restructuring Compound under CDR 1,36,032 0 Interest 75 - 194.58 The breakup of the same Interest on is given here under : Delayed payment (i) Total amount of standard of Principle 2 - 47.97 assets subjected to Total 77 - 242.55 restructuring under CDR 0 0 Debts written off during the year (ii) Total amount of sub- (` In thousand) standard assets subjected to restructuring under CDR 0 0 No of Companies Amount written down/written off (iii) Total amount of doubtful assets subjected to 2 7,414.00 restructuring under CDR 1,36,032 0 Diminution in the value of Investments written off during the year (iv) Total amount of loss assets subjected to restructuring (` In thousand) under CDR 0 0 No of Companies Amount written TOTAL 1,36,032 0 down/written off (c) Pending clarification from IRDAI in respect of 30 1,352,502.00 applicability of prudential norms, as prescribed 6. There is no difference between title of by RBI, for provisions on investment in State ownership in respect of CGS/SGS available in Government Securities, the Corporation has physical/demat format vis-à-vis shown in books followed the prudential norms of provisions for of accounts. As regards, difference between title loans and advances as prescribed by IRDAI for of ownership in respect of bonds/debentures the said investments. etc. available in physical/demat format vis a vis (d) The Corporation has considered latest available shown in books of accounts is very old NAV for the provisioning of units of venture difference. The Corporation has already fully capital. The details of latest available NAV provided for said difference in books of considered are as follows: accounts wherever required. Hence during the NAV as on No. of Venture Capital Funds year, there is no impact in the financial statements. 31st March 2016 15 31st March 2015 21 31st December 2015 05

112 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

7. As at 31st March, 2016 all the assets of the 11. The basis of amortization of debt securities is Corporation in and outside India are free as stated in Significant Accounting Policy from encumbrances except for: No. 7.14. (a) The Government of India stock 12.30%, 2016 12. The Corporation does not hold any properties deposited with Bank of India as security under for investment purposes. Section 7 of the Insurance Act, 1938 is now NIL (Previous year ` 295,315 thousand) being 13. Provisions regarding unrealized gains/losses withdrawn as per IRDAI circular dated have been stated in the Significant Accounting 30.04.2015. Policies No. 7.7. (b) The Government of India Stock, 7.95% 2032 for  Reinsurance ` 10,094 thousand and, 8.07% 2017 for ` 10,032 14. Underwriting of Direct business stopped from thousand and 8.20% 2022 for ` 29,977 1st April 2001. Figures are included in Revenue thousand, 8.24% 2027 for ` 17,420 thousand, Accounts pertain to run-off business. Run-off 8.28% 2027 for ` 97,413 thousand and 8.33% liabilities are sufficiently provided for based on 2026 for ` 19,782 thousand total amounting to ` 184,718 thousand (Previous year total advices received. amounting to ` 183,840 thousand) and cash 15. Structured solution cover: deposit of ` 4100 thousand (Previous year 4100 thousand) with Clearing Corporation of India In 2014-15, GIC Re entered into a new three year Limited as deposit towards Settlement agreement i.e. Structured Solution incepting on Guarantee Fund. 01.06.2014. The Structured Solutions contract was reviewed and renewed w.e.f. 01.06.2015 on (c) In view of margin requirements as the expiring terms and conditions as under: recommended by SEBI vide Circular dated 19/03/2008, Corporation has provided Fixed  For Non-Marine Domestic business, for risk and Deposits amounting to ` 150,000 thousand cat perils, the protection was renewed, as (Previous year ` 80,000 thousand) as margins expiring i.e. from ground up cover of INR 2,000 in cash segments viz. FDR of ` 100,000 thousand crore with a deductible of INR 100 Crore. (Previous year 50,000 thousand) as collateral is For non-marine Foreign Inward business, for risk held with NSCCL and FDR of ` 50,000 thousand  (Previous year ` 30,000 thousand) as collateral and cat perils, the arrangement was also is held with BSE. renewed as expiring i.e. from ground up cover of USD 20 mln. with a deductible of USD 10 mln. (d) Margin FDR held by Bank for issue as LC/BG of ` 10,607,018 thousand (Previous year  The arrangement was also renewed to protect ` 83,52,709 thousand). exposures of other classes of business both in domestic and foreign. 8. The Commitments made and outstanding for Loans, Investments and Fixed Assets (if any) as As per terms of the contract, the reinsurers are at 31st March, 2016 are ` 256,685 thousand required to tender a notice of cancellation at (Previous year ` 510,821 thousand). least 30 days prior to the annual anniversary 9. Value of contracts in relation to investments, for date of the contract. However, no reinsurer on the panel for this contract had tendered a notice a) Purchases, where deliveries are pending ` NIL of termination by the due date of 30.04.2016. (Previous year NIL). Hence, technically, the contract cannot be b) Sales, where payments are overdue ` NIL cancelled for the period 1.6.2016 to 31.5.2017. (Previous year NIL). Therefore, no non-renewal premium is payable 10. The historical cost of investments valued on Fair as on 31.05.2016 as the contract is renewed for Value basis is ` 75,083,599 thousand the period 01.06.2016 to 31.05.2017. (Previous year ` 70,440,575 thousand).

ANNUAL REPORT 2015-2016 113 Notes Forming Part of the Accounts

As per the contract, in case the contract is not 31.05.2017 due to movements in premium and renewed on the annual anniversary date i.e. claim recoveries during the period. If the treaty 31.05.2017, as per the treaty terms the net is discontinued on the renewal date, then the balance of the Structured Solution arrangement final balance will be ascertained and dealt with named as Funds Withheld Experience Account as per treaty terms mentioned above. (FWEA) will be dealt with as follows: 16 Premiums, less reinsurance, written from a) If the net balance of the FWEA is in a surplus business during the financial year 2015-16 position (positive), then GIC Re will receive from in India are: ` 87,363,257 thousand (Previous the reinsurer a profit commission equal to 100% year ` 76,927,547 thousand) and outside India of the gross balance of the FWEA on the annual are ` 76,384,590 thousand (Previous year anniversary date. ` 61,642,588 thousand). b) If the net balance of the FWEA is in a deficit 17. Claims less reinsurance during the financial year position (negative), then a non-renewal 2015-16 paid in India are: ` 68,825,911 thousand premium equivalent of 85% of the net negative (Previous year ` 74,291,697 thousand) and FWEA balance is to be paid by GIC Re to the outside India are ` 46,231,846 thousand reinsurers. GIC Re will then receive, in return, the (Previous year ` 48,260,116 thousand). net present value of the outstanding liabilities 18. Segment Reporting as per Accounting (net of corresponding reinstatement premium). Standard -17 “Segment Reporting” of ICAI, has It may be mentioned that as on 31.03.2016, the been complied with as required by IRDAI FWEA Balance is negative to the tune of INR 334 (Preparation of Financial Statements and crore as advised by the concerned broker, which Auditor’s Report of Insurance Companies) is subject to change up to next renewal date i.e. Regulations, 2002.

INDIAN BUSINESS (` in 000)

Class of Earned Premium Incurred Claims Net Commission Expenses of Profit/-Loss Premium Underwriting Business Management on Exchange Deficiency Profit/Loss(-)

31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015

Fire 11598 021 10419 281 16503 301 7581 537 2198 996 2419 442 198 485 171 007 2 - 335 -7302 759 246 960

Motor 31578 810 27839 701 30173 634 29329 831 5041 595 4516 738 309 482 307 688 0 0 0 0 -3945 901 -6314 557

Aviation 587 629 868 311 884 003 298 038 8 051 90 644 801 15 290 0 55 426 -305 225 519 764

Engineering 3621 825 3807 200 -341 439 2826 658 773 682 835 075 45 220 44 933 0 0 3144 362 100 534

W.C. 181 769 169 201 106 138 56 034 31 398 22 983 1 972 1 563 0 0 42 260 88 620

Liability 821 517 641 116 25 453 -156 117 109 473 123 470 8 777 9 314 0 - 83 677 814 664 367

PA 2728 000 2067 099 1385 038 1298 182 1206 286 372 589 31 253 21 838 0 0 105 422 374 490

Health 14807 382 11724 726 11185 338 13480 626 3697 541 2284 058 154 445 134 131 0 0 -229 941 -4174 090

Other Misc. 10575 984 9524 431 15110 491 7964 232 2061 292 1506 450 137 618 108 482 0 0 -6733 417 -54 733

FL/Credit 1272 284 1864 618 2256 631 1832 194 265 824 224 562 15 374 13 827 0 0 -1265 545 -205 966

Marine Cargo 1484 472 1368 479 1363 885 1708 658 220 815 226 731 12 811 13 478 0 0 -113 039 -580 388

Marine Hull 1629 920 1151 804 740 803 1606 423 302 814 280 685 13 767 18 090 442 171 -584 596 584 596 1157 575 -1337 819

Life 1817 366 957 518 1071 535 1026 986 16 746 33 160 17 316 13 350 0 0 711 770 -115 978

TOTAL 82704 980 72403 484 80464 812 68853 282 15934 512 12936 588 947 321 872 991 444 55 178 -584 596 584 596 -14056 625 -10788 794

114 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

FOREIGN BUSINESS (` in 000)

Class Earned Premium of Incurred Claims Net Commission Expenses of Profit/-Loss Premium Underwriting Business Management on Exchange Deficiency Profit/Loss(-)

31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 Fire 33441 504 29267 830 17988 870 18957 382 10187 942 7239 158 482 874 373 140 491 491 -206 462 5273 309 2491 688 Motor 9889 970 8650 958 8818 044 9544 582 3177 205 1983 088 107 860 70 971 411 653 -179 158 -1801 485 -3126 841 Aviation 4117 994 3853 882 2419 994 3789 835 699 104 786 365 47 950 60 517 71 647 -19 451 1022 593 -802 286 Engineering 3728 081 3578 180 2684 146 1679 871 1255 600 1132 651 39 588 37 620 127 637 -54 181 -123 617 673 857 W.C. 36 324 43 586 32 582 21 399 6 387 4 040 535 301 1 468 - 714 -1 713 17 132 Liability 404 531 314 965 558 109 98 630 96 819 64 698 5 571 2 674 19 070 -5 721 -236 899 143 243 PA 496 052 1171 608 185 877 770 762 144 640 187 115 3 497 4 176 18 691 -10 775 180 728 198 780 Health 8244 485 6941 260 10086 636 7810 556 1452 524 1415 385 99 107 97 394 135 236 -43 552 -3258 545 -2425 627 Other Misc. 1672 432 2059 861 944 361 725 077 561 592 542 477 19 199 15 573 87 001 -41 628 234 281 735 106 FL/Credit 112 971 135 814 -36 565 156 555 38 916 30 645 1 158 941 42 828 -17 951 152 290 -70 279 Marine Cargo 2032 796 2389 454 790 752 1833 887 486 545 668 243 12 226 16 778 55 621 -25 202 798 894 -154 656 Marine Hull 4288 061 4424 852 3432 557 4770 217 802 128 807 800 35 771 38 582 95 833 -32 116 113 438 -1223 863 Life 558 208 346 791 628 426 -94 320 59 657 44 272 4 317 2 699 7 082 -2 588 -127 110 391 551 TOTAL 69023 408 63179 040 48533 788 50064 436 18969 059 14905 937 859 653 721 364 1565 258 -639 498 0 0 2226 165 -3152 196

TOTAL BUSINESS (INDIAN+FOREIGN) (` in 000)

Class of Earned Premium Incurred Claims Net Commission Expenses of Profit/-Loss on Premium Underwriting Business Management Exchange Deficiency Profit/Loss(-)

31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 Fire 45039 525 39687 111 34492 171 26538 919 12386 938 9658 600 681 359 544 148 491 493 -206 797 0 0 -2029 450 2738 647 Motor 41468 780 36490 659 38991 678 38874 414 8218 799 6499 826 417 342 378 659 411 653 -179 158 0 0 -5747 387 -9441 398 Aviation 4705 623 4722 193 3303 996 4087 873 707 155 877 009 48 750 75 807 71 647 35 974 0 0 717 368 -282 522 Engineering 7349 906 7385 380 2342 707 4506 529 2029 282 1967 726 84 808 82 553 127 637 -54 181 0 0 3020 746 774 391 W.C. 218 093 212 787 138 720 77 434 37 785 27 023 2 508 1 864 1 468 - 714 0 0 40 547 105 752 Liability 1226 048 956 081 583 562 -57 487 206 293 188 168 14 348 11 987 19 070 -5 804 0 0 440 915 807 609 PA 3224 051 3238 707 1570 915 2068 944 1350 926 559 704 34 750 26 013 18 691 -10 775 0 0 286 151 573 270 Health 23051 867 18665 986 21271 974 21291 183 5150 064 3699 443 253 552 231 525 135 236 -43 552 0 0 -3488 486 -6599 717 Other Misc. 12248 415 11584 292 16054 852 8689 309 2622 884 2048 927 156 816 124 054 87 001 -41 628 0 0 -6499 136 680 373 FL/Credit 1385 256 2000 432 2220 066 1988 749 304 740 255 207 16 532 14 768 42 828 -17 951 0 0 -1113 255 -276 244 Marine Cargo 3517 268 3757 933 2154 637 3542 545 707 360 894 974 25 037 30 256 55 621 -25 202 0 0 685 855 -735 044 Marine Hull 5917 981 5576 656 4173 360 6376 640 1104 942 1088 485 49 538 56 671 96 275 -31 945 -584 596 584,596 1271 012 -2561 681 Life 2375 574 1304 308 1699 960 932 666 76 403 77 432 21 633 16 049 7 082 -2 588 0 0 584 660 275 573 TOTAL 151728 388 135582 524 128998 600 118917 718 34903 572 27842 524 1806 974 1594 356 1565 702 -584 320 -584 596 584 596 -11830 460 -13940 990

19. Ageing of claims – distinguishing between claims recoveries are settled with the companies through outstanding for different periods: periodical account statements. The Corporation being a reinsurance company does Nevertheless, the outstanding losses as intimated by not settle claims directly with the insured. The the companies in respect of facultative business are companies after settling the claims with their classified according to the outstanding period as per insured would recover the claims from the the details given below: Corporation as per the reinsurance obligations. Such

ANNUAL REPORT 2015-2016 115 Notes Forming Part of the Accounts

Details as on 31.03.2016 (` in thousand)

FIRE MARINE ENGINEERING AVIATION LIABILITY MISCELLANEOUS TOTAL

Sl. Outstanding No of Amount No of Amount No of Amount No of Amount No of Amount No of Amount No of Amount No Period claims claims claims claims claims claims claims 1 30 days 162 351,245 11 34,344 24 14,551 12 26,757 0 0 17 3,592 226 430,488

2 >30days upto six(6) months 343 1,675,181 90 462,934 87 156,874 100 414,701 2 3,330 19 6,669 641 2,719,688

3 >6 months upto 1 year 371 2,747,155 81 205,151 101 171,890 149 248,535 2 118 10 4,837 714 3,377,685

4 >1 year upto 5 years 1211 3,025,046 318 915,461 647 2,594,005 1098 3,381,714 120 264,913 42 120,536 3436 10,301,675

5 >5 years 329 2,201,713 160 331,455 351 219,745 1071 3,049,239 12 664,262 18 49,962 1941 6,117,026

Total 2416 10,000,339 660 1,949,344 1210 3,157,065 2430 7,120,945 136 932,624 106 185,595 6958 22,946,563 Details as on 31.03.2015 (`in thousand)

Fire Marine Engineering Aviation Liability Miscellaneous Total

Sl. Outstanding No of Amount No of Amount No of Amount No of Amount No of Amount No of Amount No of Amount No Period claims claims claims claims claims claims claims

1 30 days 43 59,558 14 92,069 12 10,750 17 422,625 0 0 3 4438 89 589,440

2 >30days upto six(6) months 261 10,69,941 65 183666 57 12,10,737 117 176,917 2 634 11 222,369 513 28,64,264

3 >6 months upto 1 year 264 42,99,450 95 851078 135 238,476 204 807,614 28 48,182 8 24,399 734 62,69,199

4 >1 year upto 5 years 1217 44,81,114 363 17,07,978 689 11,53,859 1139 29,30,749 78 643,274 69 142,767 3555 11,059,740

5 >5 years 359 17,43,704 113 125293 333 156,161 758 27,00,611 14 250,127 23 48,818 1600 50,24,714

Total 2144 11,653,766 650 29,60,084 1226 27,69,984 2235 70,38,515 122 942,217 114 442,792 6491 25,807,358

20. Claims settled and remaining unpaid for a period of The balances of amount due to/from other persons/ more than six months as on 31-03-2016 ` NIL bodies carrying on insurance business and deposits (Previous Year ` NIL). held are subject to confirmation/reconciliation. 21. Corporation has put in place system of continuous Adjustments, if any, will be accounted for on reconciliation and monitoring of balances on an receipt/confirmation of the same after examination. ongoing basis with persons/bodies carrying on 22. The Corporation has not provided for catastrophic insurance/reinsurance business. The Corporation has reserves as IRDAI has not issued any guidelines in provided a cumulative provision of ` 2,356,666 this respect. thousand (P.Y ` 3,935,192 thousand) for doubtful receivables.

116 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

23. Additional Provision of ` 101,517 thousand has been of loss ratios, this approach is known as the made in respect of Reserve for Unexpired Risk as Bornhuetter Ferguson (“BF”) method. The BF method required by IRDAI for 2015-16 for London Branch is designed to reduce the statistical variability in the (Previous year ` 52,571 thousand). IBNR estimates for the least developed underwriting years. The IBNR for GIC Re Branch Offices has been 24. During the year, the Corporation has made a calculated and certified by the respective actuary provision of ` 518,952 thousand (Previous Year of the branches. ` 365,702 thousand) towards unexpired risk reserve for life business as determined by Life Appointed 26. As per Corrigendum dated 03.07.2013 on Master Actuary, as per IRDA guidelines. (Excluding Re-takaful Circular dated 05.10.2012 issued by the Insurance business) Regulatory and Development Authority of India (IRDAI), the basis of computation of Premium 25. The provision for claims incurred but not reported Deficiency Reserve (PDR) is required to be disclosed (IBNR) for non -life business is made as certified by under “Notes forming Part of Accounts”. the appointed actuary. For GIC Re Head Office, the actuary has adopted a chain ladder method for The above circular provides that from 01.04.2015 determining the IBNR provision for the non-life premium deficiency shall be recognized at business. The method assumes that trends in the segmental revenue account level. The four historic data will broadly be followed in the future. Segmental Revenue accounts figures for the For the most recent underwriting periods the chain financial year 2015-16 are as per the details furnished ladder IBNR estimate is modified using a credibility below: weighting approach that relies on a-priori estimates (` in Crore)

SN Details Segments

Fire Misc Marine Life TOTAL

1 Gross Premium 6476.12 10715.66 1013.38 230.65 18435.81

2 Net Premium 5130.65 10201.09 852.79 190.26 16374.78

3 Earned Premium 4503.95 9487.80 943.52 237.56 15172.84

4 Incurred Claims 3449.22 8647.85 632.80 170.00 12899.86

5 Difference (3-4) i.e. EP minus IC 1054.74 839.96 310.73 67.56 2272.98 Since the earned premium for each of the above revenue accounts is more than the incurred Claims, no PDR is recognized for the FY 2015-16 (Refer Significant accounting Policy No. 11). (` In thousand) 27. The balance of amount of service tax is subject to reconciliation with service tax returns. The financial Class of Business Amount impact thereof is not material. Fire 124,0623 28.(a) The details on account of revaluation included in Life 3,012 the net Outstanding Loss Reserves (OSLR) at the end of the year are as under: Marine 247,470

Miscellaneous 720,791

Total 2,211,897

ANNUAL REPORT 2015-2016 117 Notes Forming Part of the Accounts

(b) Reference/Benchmark Exchange Rates : (` In thousand) Average INR Rate Average INR Rate Closing INR Rate Closing INR {April ’15 to {April ’14 to {31.03.2016} Rate {31.03.2015} March ’16} March ’15}

AED 17.80069 16.63829 18.03899 16.91574

GBP 98.44151 98.44635 95.12175 92.0851 MYR 16.22889 18.25974 16.98718 16.80365

USD 65.37612 61.11090 66.2500 62.1315

EURO 72.17484 77.35045 75.37925 66.86592

 Human Resources (i) Pension Superannuation Scheme 29. Provision for Productivity Linked Lump-sum (ii) Defined Benefit Plan Incentive to the employees for the year ended (a) Leave Encashment 31st March 2016 ` NIL (Previous Year ` 16,800 (b) Gratuity thousand). (c) Provident Fund 30. Employees Benefits (iii) Settlement Benefit The Corporation has classified the various During the year Corporation has recognized the benefits provided to employees as under: following amounts in the Profit And Loss Account based upon the actuary reports: ( ` In thousand)

Particulars Year ending Year ending 31st March 2016 31st March 2015 Pension Superannuation Scheme (Employees’ Pension Fund) 133,788 40,771 Leave Encashment (Earned leave and Sick Leave) 17,842 5,878 Gratuity (Employees Gratuity Fund) 33,473 87,774 Provident Fund (Employees Provident Fund) 22,024 4,885 Settlement Benefit 1,829 1,547

118 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

A) Change in the Present Value of Obligation (` In thousand) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 Present Value of Obligation as at 1 April 1,303,844 1,159,320 301,229 183,862 227,340 221,462 12,194 10,648 Interest Cost 96,865 88,920 22,802 14,033 17,778 17,097 954 969 Past Service Cost 0 0 0 0 0 0 0 0 Current Service Cost 41,209 92,567 22,524 14,410 37,263 31,881 697 576 Curtailment Cost/(Credit) 0 0 0 0 0 0 0 0 Settlement Cost/(Credit) 0 0 0 0 0 0 0 0 Benefit Paid (130,312) (53,168) (19,279) (4,168) 0 0 0 0 Actuarial (Gain)/Loss on Obligation 103,224 16,205 43,921 93,092 (37,199) (43,100) 178 0 Present Value of Obligation at 31 March 1,414,830 1,303,844 371,197 301,229 245,183 227,340 14,024 12,195 * EL + SL B) Change in the Fair value of Plan Assets (` In thousand) Particulars Pension Gratuity Leave Salary Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 Fair Value of Plan Assets as at 1 April 1,272,735 923,723 225,554 195,961 0 0 0 0 Expected return on Plan Assets 111,959 95,942 20,319 15,146 0 0 0 0 Actuarial Gain/(Loss) on Obligation (44,486) 60,980 35,455 18,615 0 0 0 0 Contribution 70,924 245,259 75,675 0 0 0 0 0 Benefit Paid (130,312) (53,168) (19,279) (4,168) 0 0 0 0 Fair Value of Plan Assets at 31 March 1,320,857 1,272,735 337,724 225,554 0 0 0 0 Unpaid Amount 0 0 0 0 0 0 0 0 Fair Value of Plan (Net) Assets at 31 March 1,320,857 1,272,735 337,724 225,554 0 0 0 0 Actual return 107,511 156,922 55,774 33,761 0 0 0 0

ANNUAL REPORT 2015-2016 119 Notes Forming Part of the Accounts

C) Reconciliation of Present Value of Defined Benefit Obligation and the Fair Value of Assets (` In thousand) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015

Present Value of Obligation 1,414,830 1,303,844 371,197 301,229 245,182 227,340 14,024 12,195 Fair Value of Plan Assets 1,320,857 1,272,735 337,724 225,554 0 0 0 0 Unfunded Net Asset/ (Liability) Recognized in Balance Sheet (93,973) (31,109) (33,473) (75,675) (245,182) (227,340) (14,024) (12,195) * EL + SL D) Expenses recognized in the Profit and Loss Account (` In thousand) For year ending Pension Gratuity Leave Salary * Settlement 31st March 2016 Current Service Cost 41,209 22,524 37,263 697 Interest Cost 96,865 22,802 17,778 954 Curtailment Cost/(Credit) 0000 Settlement Cost/(Credit) 0000 Expected Return on Plan Assets (111,959) (20,319) 0 0 Net actuarial (gains)/losses 107,673 8,466 (37,199) 178 recognized in the period Total Expenses recognized in 133,788 33,473 17,842 1,829 the Profit & Loss A/c * EL + SL (` In thousand) For year ending Pension Gratuity Leave Salary * Settlement 31st March 2015 Current Service Cost 92,567 14,410 31,881 576 Interest Cost 88,920 14,033 17,097 969 Curtailment Cost/(Credit) 0 0 0 0 Settlement Cost/(Credit) 0 0 0 0 Expected Return on Plan Assets (95,942) (15,146) 0 0 Net actuarial (gains)/losses (44,774) 74,477 (43,100) 0 recognized in the period Total Expenses recognized in 40,771 87,774 5,878 1,545 the Profit & Loss A/c * EL + SL

120 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

E) Plan Assets (In %) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015

Government Securities {Central & State} 55.00 50.00 0.00 0.00 0.00 0.00 0.00 0.00

High quality Corporate Bonds 0.00 30.00 0.00 0.00 0.00 0.00 0.00 0.00

Others 45.00 20.00 100.00 100 0.00 0.00 0.00 0.00 * EL+SL

F) Actuarial Assumption (In %) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015

Discount Rate 7.82 7.85 7.82 7.72 7.82 7.72 7.82 7.72

Expected return on assets 9.00 9.00 8.00 8.00 0.00 0.00 0.00 0.00

Salary Escalation 8.00 10.00 10.00 12.00 10.00 12.00 10.00 12.00

Attrition/ withdrawal Rate 2.00 2.00 3.00 3.00 3.00 3.00 3.00 3.00

Indian Assured Lives Mortality 2006-08 2006-08 2006-08 2006-08 2006-2008 2006-08 1994-96 1994-96 * EL+SL

ANNUAL REPORT 2015-2016 121 Notes Forming Part of the Accounts

G) Other Disclosures Pension (` in thousand) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation 103,224 16,205 183,129 42,677 121,258 59,993 On plan assets 44,486 (60,980) 9,392 4,330 45,829 29,683 Present Value of obligation 1,414,830 1,303,844 1,159,320 905,058 844,290 701,951 Fair Value of plan assets 1,320,857 1,272,735 923,723 845,167 740,697 602,006 Excess of obligation over plan assets (93,973) (31,109) 235,597 59,891 103,594 99,945 Gratuity (` in thousand) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation 43,921 93,092 (18,360) (9,536) 20,905 32,456 On plan assets 35,455 18,615 629 7,322 (2,709) (5,504) Present Value of obligation 371,197 301,229 183,862 183,101 177,284 148,538 Fair Value of plan assets 337,724 225,554 195,961 187,826 138,960 101,650 Excess of obligation over plan assets (33,473) (75,675) (12,099) (4,725) 38,324 46,888 Leave salary (` in thousand) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation (37,199) (43,100) 1,320 (1,268) 65,463 6,199 On plan assets 0 00000 Present Value of obligation 245,182 227,340 221,463 165,615 149,795 81,672 Fair Value of plan assets 0 00000 Excess of obligation over plan assets (245,182) (227,340) 221,463 165,615 149,795 73,112 Settlement (` in thousand) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation 178 0 119 156 322 (522) On plan assets 0 00000 Present Value of obligation 14,024 12,195 10,648 8,800 7,250 6,850 Fair Value of plan assets 0 00000 Excess of obligation over plan assets 14,024 12,195 10,648 8,800 7,250 6,850 Actuarial gain/loss has been charged to Profit and Loss Account.

122 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

 Secretarial 31. As per the resolution passed at the Extraordinary General Meeting held on 04th February 2016 at GIC Re, Head Office, Mumbai, it was approved to subdivide 10,00,00,000 (Ten crore) equity shares of ` 100/- (Rupee One hundred) each into 1000,00,00,000 (One Thousand Crore) equity shares of ` 1/- (Rupee One) each. Accordingly, the number of equity shares and the face value thereof has been recorded at Rupee One per share for Authorized, Issued & Subscribed and Called-up Equity Share capital of the Corporation as on 31.03.2016 (refer schedule 5 and 5A).

32. Investment in Subsidiary & Associate Companies (As on 31st March 2016) (` In thousand) Sl. Name of the company Currency No. of Shares Face % Acquisition No. value Holding Cost

Subsidiary Company

1. GIC Re South Africa Ltd. Zar 55,750,000 2 Zar 100% 734,591

2. GIC Re India Corporate Member Ltd. GBP 01 1 GBP 100% 2

Total Subsidiary Investments 734,593

Associate Company

1. Agriculture Ins. Co. of India Ltd INR 70,000,000 10 INR 35% 700,000

2. GIC Bhutan Re Ltd Nu 1,300,000 100 Nu 26% 130,000

3. India International Ins. Pte Ltd. S.D. 10,000,000 1 S.D. 20% 29,479

Total Associate Investments 859,479

Investment in Subsidiary & Associate Companies (As on 31st March 2015) (` In thousand) Sl. Name of the company Currency No. of Shares Face % Acquisition No. value Holding Cost Subsidiary Company 1. GIC Re South Africa Ltd. Zar 55,750,000 2 Zar 100% 734,591 2. GIC Re India Corporate Member Ltd.* Total Subsidiary Investments 734,591 Associate Company 1. Agriculture Ins. Co. of India Ltd INR 70,000,000 10 INR 35% 700,000 2. GIC Bhutan Re Ltd Nu 1,300,000 100 Nu 26% 130,000 3. India International Ins. Pte Ltd. S.D. 1,00,00,000 1S.D. 20% 29,479 Total Associate Investments 859,479 *Note: GIC Re India Corporate Member has been treated as subsidiary of the Corporation as management control of the same passed on to the Corporation in the F.Y. 2013-14, even though the payment for transfer of shares was done on 29.01.2016.

ANNUAL REPORT 2015-2016 123 Notes Forming Part of the Accounts

33.(i) Related party Disclosures as per Accounting Standard - 18 “Related Party Transaction” issued by ICAI: a) Subsidiary Company:  GIC Re South Africa Ltd., Johannesburg, S.A.  GIC Re India Corporate Member Limited, London, U.K.

b) Associate Company :  India International Pte. Limited, Singapore  Agriculture Insurance Company of India Limited, New Delhi, India  GIC Bhutan Re Ltd, Bhutan

c) Key Management Personnel:  Smt. Alice Vaidyan, CMD (w.e.f. 23.01.2016)  Shri K Sanath Kumar, Acting CMD (up to 18.02.2016)  Shri A.K. Roy, CMD (up to 31.07.2015)  Smt. Suchita Gupta, Company Secretary  Smt. Alice Vaidyan, CFO (Up to 04.09.2015)  Shri V C Jain, CFO (w.e.f. 04.09.2015)  Shri G C Gaylong, Whole Time Director (w.e.f. 27.01.2016)

Nature and volume of transactions: With (a&b) above

33.(ii) Statement Showing Related Party Disclosures as per AS-18 of ICAI. a. Subsidiaries (` in thousand) Name of the Company GIC Re South Africa Ltd., GIC Re India Corporate Johannesburg, S.A. Member Limited, London, U.K.

2015-16 2014-15 2015-16 2014-15

Premium Accepted 1,014,430 - 1,518,622 -

Premium Ceded - - - -

Net Premium 1,014,430 - 1,518,622 -

Commission Paid 271,547 - 641,510 -

Commission Recovered - - - -

Net Commission 271,547 - 641,510 -

Claims Paid 73,131 - 839,788 -

Claims Recovered - - - -

Net Claims 73,131 - 839,788 -

Balance on 31st March (-) Indicates amount payable by GIC -13,407 113,985

124 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

b. Associates (` in thousand) Name of the Company Agriculture Insurance India International GIC Bhutan Re Ltd, Company of India Limited Pte Limited Bhutan 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 Premium Accepted 5,204,251 5,536,543 960,893 1,005,087 13,549 - Premium Ceded 149 - 3,539 3,381 - - Net Premium 5,204,102 5,536,543 957,353 1,001,707 13,549 - Commission Paid 609,637 545,391 218,924 154,145 - - Commission Recovered - - 428 466 - - Net Commission 609,637 545,391 218,497 153,679 - - Claims Paid 4,701,872 5,191,590 1,203,636 772,714 - - Claims Recovered ------Net Claims 4,701,872 5,191,590 1,203,636 772,714 - - Balance on 31st March NIL 617,934 52,430 259,618 8,657 - c. Details of Key Managerial Personnel Remuneration for the year ended 31.03.2016 is as follows: (` In thousand) Sl. Name Designation Gross Corp.’s House Loan Vehicle LTS Other No Salary P.F. Perquisite Perquisite Perquisite Perquisite Perquisite 1 Alice Vaidyan Chairman-cum- (23.01.16 to Managing 31.03.16) Director 1,590.34 258.95 0.00 0.00 4.12 0.00 0.00 2 Alice Vaidyan Chief Financial (01.04.15 to Officer 04.09.15) 664.95 29.98 0.00 0.00 9.24 0.00 0.00 3 K.Sanath Kumar Acting Chairman- (31.07.15 to cum-Managing 18.02.16) Director 2,211.74 280.43 0.00 0.00 0.00 0.00 0.00 4 A.K. Roy Chairman-cum- (01.04.15 to Managing 31.07.15) Director 720.00 32.00 33.30 0.00 7.20 0.00 183.07 5 G.C. Gaylong (27.01.16 to 31.03.16) Director 978.772 141.13 19.35 0.00 3.89 0.00 0.00 6 V.C. Jain Chief Financial 1,808.02 248.14 61.29 0.00 12.42 0.00 2.88 (04.09.15 to Officer 31.03.16) 7 Suchita Gupta Company (01.04.15 to Secretary 2,312.07 308.65 106.67 0.00 21.60 0.00 3.33 31.03.16) Note : The above salary paid to Key Managerial Personnel includes arrears paid to them during the year as per the Government of India Notification dated 23/01/2016, for revision in pay scales w.e.f 01/08/2012.

ANNUAL REPORT 2015-2016 125 Notes Forming Part of the Accounts

Details of Key Managerial Personnel Remuneration for the year ended 31.03.2015 is as follows: (` In thousand) Sl. Name Designation Gross Corp.’s House Loan Vehicle LTS Other No Salary P.F. Perquisite Perquisite Perquisite Perquisite Perquisite 1 A.K. Roy Chairman-cum- 2,593.73 216.00 133.20 0.00 21.60 0.00 0.00 Managing Director

2 Alice Vaidyan CFO 1,438.94 190.75 0.00 0.00 21.60 0.00 5.00

3 Suchita Gupta Company 1,185.90 60.22 83.41 0.00 21.60 428.48 0.00 Secretary 33.(iii) In terms of Para 9 of AS-18, no disclosure has been made in the financial statements of state-controlled enterprises as regards related party relationships with other state-controlled enterprises and transactions with such enterprises. 34. As per the Ministry of Finance guidelines, Corporation has proposed dividend of ` 8,600,000 thousand for the year 2015-16, for which a dividend distribution tax of ` 1,750,788 thousand is also provided in the books. 35. Details of the penalty payable by the Corporation during the year 2015-16 are given below: Sl Authority Non- Amount in ` in thousand No. Compliance/ Penalty Penalty Penalty Violation Awarded Paid Waived/Reduced 1 Insurance Regulatory and Development Authority Nil Nil Nil Nil 2 Service Tax Authorities Nil Nil Nil Nil 3 Income Tax Authorities Nil Nil Nil Nil 4 Any other Tax Authorities Nil Nil Nil Nil 5 Enforcement Directorate/Adjudicating Authority/Tribunal or any Authority under FEMA Nil Nil Nil Nil 6 Registrar of Companies/NCLT/CLB/ Department of Corporate Affairs or any Authority under Companies Act, 2013 Nil Nil Nil Nil 7 Penalty awarded by any Court/ Tribunal for any matter including claim settlement but excluding compensation Nil Nil Nil Nil 8 Securities and Exchange Board of India Nil Nil Nil Nil 9 Competition Commission of India Nil Nil Nil Nil 10 Any other Central/State/Local Government/Statutory Authority Nil Nil Nil Nil

126 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

 Corporate Accounts 36. Earnings per Share (EPS) as per Accounting Standards 20 issued by ICAI: 2015-16 2014-15

Profit after Tax ` 28,483,893 thousand ` 26,937,205 thousand

Number of equity shares 4,300,000,000 4,300,000,000

Nominal value of share ` 1/- ` 1/-

Basic and Diluted EPS ` 6.62 ` 6.26

37. Disclosures as per Accounting Standard – 22 “Accounting for Taxes on Income”: Deferred Tax assets are recognized only if there is a virtual certainty backed by convincing evidence that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The breakup of Net Deferred Tax Assets is as under: (` In thousand) Particulars As on 31.03.2016 As on 31.03.2015 Deferred Tax Deferred Tax Asset Liability Asset Liability

Timing difference on account of difference in book depreciation & depreciation under Income Tax Act, 1961. - 109,544 49,037 -

Provision for employees benefits 133,812 - 125,668 -

Others - - - -

Foreign Branches --- -

TOTAL 133,812 109,544 174,705 -

Net Deferred Tax 24,268 174,705 -

38. The basis of apportionment of operating expenses to the Revenue Accounts has been stated in the Significant Accounting Policy No. 5.3. 39. (a) Till the F. Y. 2013-14, depreciation on fixed assets was charged on written-down value method at the higher of the rates specified in the Income Tax Rules, 1962 and those specified in Schedule XIV to the Companies Act, 1956. In respect of leasehold properties and intangible assets amortization was made over the period of lease/use. From the F.Y. 2014 – 15, the Corporation has changed the method of depreciation from written down value to straight line method. However, there is no material impact on the financial statements due to such change in deprecation method. (b) Pursuant to the enactment of the Companies Act 2013, the corporation has applied the estimated useful lives as specified in schedule II. Accordingly, the un-amortized carrying value is being depreciated/amortized over the revised/remaining useful lives. The written down value of fixed assets whose lives have expired as at April 01, 2014 had been charged to Profit and Loss Account in the F.Y 2014-15.

ANNUAL REPORT 2015-2016 127 Notes Forming Part of the Accounts

40. Contingent Liabilities: (f) Reinsurance obligations to the extent not provided for in the accounts NIL (Previous (a) Partly paid up investments ` Nil (Previous year year NIL) in view of Significant Accounting NIL) Policy No. 2.1. (b) Underwriting commitments outstanding ` NIL (g) Pending legal/arbitration cases are very old. (Previous year NIL) These cases are primarily against the erstwhile (c) Claims, other than under policies not subsidiary companies and the Corporation has acknowledged as debts: ` 11,000 thousand been impleaded as a proforma respondent (Previous year ` 11,000 thousand) because of its erstwhile status of the holding (d) Guarantees/LC given by or on behalf of the company. No financial impact of such cases is Corporation ` 10,607,018 thousand (Previous envisaged. year ` 8,352,709 thousand). (e) Statutory demand/liabilities in dispute - Income-tax demands disputed, not provided for ` 17,027,139 Thousand (Previous year ` 22,496,974 thousand).

41. Performance of Overseas Branches: (` In thousand) Dubai Malaysia London

Gross Premium 2,06,16,909 78,54,393 50,24,927

Net Premium 1,97,63,572 75,55,300 42,91,256

Earned Premium 1,92,24,442 71,85,982 36,79,798

Incurred Claims 2,06,52,435 55,67,331 26,02,847

Net Commission 45,15,721 22,36,272 866,481

Expenses of Management 2,36,046 41,555 134,644

Profit/-Loss on Exchange 10,517 -87,279 557,154

Underwriting Profit/(-)Loss -61,69,243 -746,455 632,980

Net Inv. Income in Rev. A/c 263,574 173413 135,064

Revenue Profit/(-)Loss -59,05,669 -573,042 768,044  GENERAL 42. The Corporation generally makes payments to its creditors within a period of 45 days as stipulated in Micro, Small and Medium Enterprises Act 2006. The Corporation is in the process of identifying Micro, Small and Medium Enterprises as defined in above referred act. Hence relevant disclosures are not made. The Corporation has neither received any claims for interest nor provided any interest payable to Micro, Small and Medium Enterprises as required by aforesaid act. 43. The Corporation has paid the arrears of wage during the year, as per the Government of India notification dated 23/01/2016, for revision in pay scales w.e.f 01/08/2012.

128 ANNUAL REPORT 2015-2016 Notes Forming Part of the Accounts

44. The Corporation has prepared Cash flow statement been noticed and reported. The funds have been adopting the indirect method. located and the bank account has been frozen by the US Government Authorities. The Corporation has 45. Tax liabilities in respect of foreign operation, if any, taken appropriate legal steps for recovery of the is accounted on actual basis. amount including filing Letter Rogatory with 46. Prior period items have not been separately appropriate US authorities. Recovery proceedings disclosed, as the amount is not material. have been initiated and Corporation is confident of 47. The summary of the financial statements of the recovery of entire amount. Pending recovery, the Corporation for the last five years is as per Annexure I. amount is shown under the head receivable from debtors as suspense account. 48. During the year a fraud on the Dubai branch of the Corporation, on account of unauthorized bank 49. The Accounting Ratios of the Corporation are stated transfer of USD 14,27,040/- (equivalent to in Annexure II. ` 9,45,41,400/- approximately) from Bank of Baroda, 50. Figures relating to the previous year have been Dubai, account number 90010200006032 on June regrouped/rearranged, wherever necessary. 04, 2015, to PNC Bank A/C of Washington, US has

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 129 Summary of Financial Statements

SUMMARY OF FINANCIAL STATEMENTS Annexure - I FOR THE PERIOD ENDED 31st MARCH 2016 (` in lakh) Particulars 2015-16 2014-15 2013-14 2012-13 2011-12 OPERATING RESULTS 1 Gross Premium 1843581 1518397 1468012 1508587 1361795 2 Net Premium Income 1637478 1385701 1321262 1377123 1255824 3 Income from investments (net) 280272 302482 256880 220530 141707 4 Profit on Exchange Fluctuation 15657 -5843 23855 12640 1065 5 Total Income 1933407 1682340 1601997 1610293 1398596 6 Commissions (Net) (Including Brokerage) 349036 278425 244899 290575 206663 7 Operating Expenses 18070 15944 17829 11214 10305 8 Net Incurred Claims 1289986 1189177 1210729 1094234 1398641 9 Change in Unexpired Risk Reserve 120195 29876 -39620 44945 124251 9a Premium Deficiency -5846 5846 0 -14147 14147 10 Operating Profit/loss 161966 163072 168160 183472 -355411 NON-OPERATING RESULT 11 Total Income under Shareholders account (Net) 133685 119651 62184 54745 106344 12 Profit/(loss) before tax 295651 282723 230344 238217 -249067 13 Provision for tax 10812 13351 5026 3755 -2192 14 Profit/(loss) after tax 284839 269372 225318 234462 -246875 MISCELLANEOUS 15 Policy holders Account : Total funds 2955589 2701832 2702451 2602203 2385800 Total Investments 3660366 3948334 3356775 3034009 2748688 Yield on Investments 12.91 14.08 12.13 10.13 10.37 16 Shareholders Account : Total funds 1482996 1300161 1096858 965456 768546 Total Investments 1783231 1624172 1208808 963601 1622452 Yield on Investments 12.91 14.08 12.13 10.13 10.37

130 ANNUAL REPORT 2015-2016 Summary of Financial Statements

(` lakh) Particulars 2015-16 2014-15 2013-14 2012-13 2011-12 17 Paid up equity Capital 43000 43000 43000 43000 43000 18 Net worth 1482996 1300161 1096858 965456 768546 19 Total assets 7973258 7809332 6699186 5993989 5373092 20 Yield on total investments 12.91 14.08 12.13 10.13 10.37 21 Earnings per share (`) 6.62 6.26 5.24 5.45 -5.74 22 Book Value per share (`) 34.49 30.24 25.51 22.45 17.87 23 Total Dividend 86000 54000 44935 46870 0 24 Dividend per share (`) 2.00 1.26 1.05 1.09 0

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 131 Performance Ratios

RATIOS FOR NON - LIFE COMPANIES Annexure - II Ratio/Percentage Performance Ratio Twelve Months Twelve Months Ending Ending 31.03.2016 31.03.2015 Domestic Foreign Domestic Foreign Total Total 1 Gross Premium Growth Rate (segment wise) (Gross premium for the current year divided by the gross premium for the previous year) Fire Insurance 26.2 44.1 7.7 -12.1 Motor Insurance 9.4 42.2 18.2 -5.1 Aviation Insurance -94.3 -17.1 151.0 46.3 Engineering insurance 9.5 14.9 -11.7 -1.4 W.C. 37.2 46.8 -17.2 -49.0 Liability 2.5 136.8 48.5 -38.4 PA 55.7 -14.1 6.1 -69.1 Health 25.2 8.5 27.6 28.5 Other Miscellaneous Insurance 38.0 4.4 -4.0 -28.4 FL/Credit 20.9 27.6 -42.9 -41.5 Marine Cargo 3.4 -23.9 -0.1 -14.9 Marine Hull -17.2 -1.1 27.0 0.5 Life 41.1 74.0 24.3 29.4 2 Gross Premium to Net worth ratio : (Gross premium for the current year divided by 124.3 116.8 paid up capital and free reserves) 3 Growth rate of Net Worth (Net worth as at the current balance sheet date divided 14.1 18.5 by Net worth as at the previous balance sheet date) 4 Net retention ratio (segment wise) (Net premium divided by gross premium) Fire Insurance 55.5 90.7 67.9 92.6 Motor Insurance 100.0 100.0 100.0 100.0 Aviation Insurance -182.5 83.5 88.8 85.2 Engineering insurance 77.6 95.9 79.9 100.0 W.C. 100.0 100.0 100.0 100.0 Liability 90.5 100.0 87.2 100.0 PA 99.8 100.0 99.5 100.0 Health 100.0 100.0 100.0 100.0 Other Miscellaneous Insurance 83.8 100.0 83.3 100.0 FL/Credit 72.5 100.0 100.0 100.0 Marine Cargo 92.8 83.9 84.3 100.0 Marine Hull 80.3 82.5 68.9 88.7 Life 78.1 100.0 74.3 84.7

132 ANNUAL REPORT 2015-2016 Performance Ratios

RATIOS FOR NON - LIFE COMPANIES Annexure - II

Ratio/Percentage Performance Ratio Twelve Months Twelve Months Ending Ending 31.03.2016 31.03.2015 Domestic Foreign Domestic Foreign Total Total

5 Net commission ratio (segment wise) (Commission paid net of reinsurance commission divided by net written premium for that segment) Fire Insurance 18.7 25.8 21.3 25.8 Motor Insurance 15.3 26.7 15.0 23.7 Aviation Insurance -5.2 18.8 6.8 17.2 Engineering insurance 20.7 32.0 23.7 31.6 W.C. 14.9 14.8 15.0 13.7 Liability 12.9 17.0 15.5 26.9 PA 36.3 30.6 17.5 34.0 Health 12.5 6.5 11.5 6.9 Other Miscellaneous Insurance 30.1 81.1 25.8 82.5 FL/Credit 22.4 30.5 16.6 30.7 Marine Cargo 13.1 37.2 15.3 32.7 Marine Hull 19.3 20.3 17.2 18.8 Life 1.2 13.0 3.4 19.8

6 Expenses of management to gross premium ratio 1.0 1.1 (Expenses of management divided by Gross premium) 7 Expenses of management to Net written premium ratio (Expenses of management divided by 1.1 1.2 Net written premium) 8 Net Incurred Claims to Net Earned Premium 85.0 87.7 9 Combined ratio : (Net Incurred Claims divided by Net Earned Premium plus expenses of management 107.4 109.0 (including net commission) divided by Net written premium) 10 Technical reserves to net premium ratio: (Reserve for unexpired risks plus premium deficiency reserve plus reserve for outstanding claims 180.5 195.0 (including IBNR and IBNER divided by net premium) (All on net basis)

ANNUAL REPORT 2015-2016 133 Performance Ratios

RATIOS FOR NON - LIFE COMPANIES Annexure - II

Ratio/Percentage Performance Ratio Twelve Months Twelve Months Ending Ending 31.03.2016 31.03.2015 Domestic Foreign Domestic Foreign Total Total 11 Underwriting balance ratio: -7.6 -9.6 12 Operating profit ratio: (Underwriting profit/loss plus investment 9.9 11.8 income divided by net premium) 13 Liquid assets to liabilities ratio: (Liquid assets (Short Term Investments (Schedule 8) plus Short Term Loans (Schedule 9) plus Cash & Bank Balances (Schedule 11)) of the insurer divided by policyholders liabilities 41.5 34.4 (to be discharged within 12 months) (claims outstanding (Schedule 13) plus reserve for unexpired risk and Premium Deficiency (Schedule 14))

14 Net earnings ratio: 17.4 19.4 (Profit after tax divided by net premium)

15 Return on net worth 19.2 20.7 (Profit after tax divided by net worth) 16 Available Solvency Margin (ASM) to Required Solvency Margin (RSM) ratio (Ratio of Available Solvency Margin (ASM) at the end of the Quarter to 3.48 3.04 the Required Solvency Margin (RSM) required to be maintained as per regulations. 17 NPA ratio 1.10 0.79

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

134 ANNUAL REPORT 2015-2016 Cash Flow Statement

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2016 AS PER INDIRECT METHOD

(` In thousands) Particulars 31st March 2016 31st March 2015

A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxation as per Profit & Loss A/c 29565 068 28272 347 Adjustments for: Exchange -Loss/Gain charged -2320 685 859 451 Provision for diminution in value of investment 1359 916 588 077 Provision for doubtful loans, investments & Debts -1158 436 1107 131 Amortisation of Premium on Investment 185 605 181 025 Depreciation 95 789 92 462 -Profit/Loss on sale of Assets 223 - 167 Provision for Leave Encashment & Salary Arrears -106 467 -56 489 Sundry Balances Written off/-back 0 -1944 055 0 2771 490 Operating Profit before working capital changes 27621 013 31043 837 Changes in Unexpired Risk Reserves 12019 459 2987 612 Changes in Premium Deficiency Reserve -584 596 584 596 Changes in Provisions for Outstanding Claims 13940 843 -3634 095 Changes in Income accrued on Investments -717 106 -857 789 Changes in Balances with Insurance Companies 2993 839 165 893 Changes in Advance and Deposits -8971 612 -14031 392 Changes in other Current Liabilities 7674 907 26355 734 7230 054 -7555 121 Cash generated from operations 53976 747 23488 716 Income Tax Paid (Net) 4043 785 2224 903 Net Cash from Operating Activities 58020 532 25713 619 B) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets -424 024 -327 078 Proceeds from sale of Fixed Assets 1 617 1 617 Foreign Currency Translation Reserve 2248 603 -1322 146 Changes in net Investments -35334 950 -24691 185 Net Cash used in Investing Activities -33508 754 -26338 792

ANNUAL REPORT 2015-2016 135 Cash Flow Statement

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2016 AS PER INDIRECT METHOD

(` In thousands) Particulars 31st March 2016 31st March 2015

C) CASH FLOWS FROM FINANCING ACTIVITIES Dividend Paid -5400 000 -3311 000 Dividend Tax Paid -1099 332 -562 705 Net Cash from Financing Activities -6499 332 -3873 705 D) Effect of Foreign Exchange on Cash & Cash equivalents(Net) 2320 685 -859 451 Net increase in Cash and Cash equivalents (A+B+C+D) 20333 131 -5358 329 Cash and Cash equivalents at beginning of period 77280 874 82639 203 Cash and Cash equivalents at the end of period 97614 005 77280 874

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

136 ANNUAL REPORT 2015-2016 Balance Sheet Abstract and Company’s General Business Profile

2015- 16

I. Registration Details

Registration No. 16133 State Code 11

Balance Sheet Date 3/31/2016

II. Capital Raised During the year (Amount in ` thousand)

Public Issue N I L Right Issue N I L

Bonus Issue N I L Private Placement N I L

III. Position of Mobilisation and Deployment of Funds (Amount in ` thousand)

Total Liabilities 392825 538 Total Assets 392825 538

Sources of Funds

Paid-up Capital 4300 000 Reserve & Surplus 154018 207

Secured Loans N I L Unsecured Loans N I L

Deferred Taxation Liability 0 Fair Value Change Account 234507 331

Application of Funds

Net Fixed Assets 1702 666 Investment 548017 383

Net Current Assets -156918 779 Misc. Expenditure N I L

Accumulated Losses N I L Deffered Tax Asset 24 268

IV. Performance of Company (Amount in ` thousand)

Turnover 197187 001 Total Expenditure 167621 934

Profit/Loss Before Tax 29565 067 Profit/Loss After Tax 28483 892

Earning per Share in (Rs.) 6.62 Dividend @ % 200.00

V. Generic Name of The Principal Products/Services of Company (as per Monetary terms)

Item Code No. NOT APPLICABLE

Product Discription REINSURANCE SERVICE

ANNUAL REPORT 2015-2016 137 Performance Highlights

(` & $ in ‘000) As on 31.03.2016 As on 31.03.2015 ` $ ` $ Gross Premium 184 358 121 2 782 764 151 839 660 2 443 843 Net Premium 163 747 847 2 471 666 138 570 134 2 230 272 Net Earned Premium 151 728 388 2 290 240 135 582 524 2 182 187 Net Claims 128 998 600 1 947 149 118 917 718 1 913 968 % to Earned Premium 85.0% 85.0% 87.7% 87.7% Net Commission 34 903 572 526 846 27 842 524 448 123 % to Earned Premium 23.0% 23.0% 20.5% 20.5% Operating Expenses and Other Outgo less Other Income 241 272 3 642 2 178 676 35 066 Premium Deficiency - 584 596 - 8 824 584 596 9 409 Investment Income Less Expenses apportioned to Revenue a/c 28 027 245 423 053 30 248 157 486 841 Revenue Profit/Loss(-) 16 196 785 235 656 16 307 167 271 871 Investment Income Less Expenses apportioned to P/L a/c 13 487 114 203 579 12 276 980 197 597 Other Income less Other Outgo 1 846 781 27 876 489 311 7 875 Res. for Doubtful Debts, Investment W/off & Amortisation of Prem.on Inv. 1 965 612 29 670 801 110 12 894 PROFIT BEFORE TAX 29 565 068 437 441 28 272 347 464 449 Provision for tax including deferred tax 3 286 807 49 612 1 335 142 21 489 PROFIT AFTER TAX 26 278 261 387 829 26 937 205 442 961 ASSETS: Investments 544 359 624 8 216 749 557 250 627 8 968 891 Loans 3 657 759 55 211 3 938 449 63 389 Fixed Assets 1 702 666 25 701 1 376 270 22 151 Deferred Tax Asset 24 268 366 174 705 2 812 Cash and Bank Balances 97 614 005 1 473 419 77 280 875 1 243 828 Advances and Other Assets 149 967 476 2 263 660 141 951 874 2 284 701 TOTAL ASSETS 797 325 798 12 035 106 781 972 799 12 585 770 LIABILITIES: Share Capital 4 300 000 64 906 4 300 000 69 208 Reserve and Surplus 154 018 207 2 324 803 133 636 500 2 150 866 Deferred Tax Liabilities 0 0 0 0 Fair Value Change Account 234 507 331 3 539 733 281 468 452 4 530 205 Current Liabilities & Provisions 404 500 260 6 105 664 362 567 847 5 835 492 TOTAL LIABILITIES 797 325 798 12 035 106 781 972 799 12 585 770 1 US$ = ` 66.250 as on 31.03.2016 1 US$ = ` 62.15 as on 31.03.2015 (Percentage relate to the net earned premium of the corresponding period) Solely for the convenience of readers, performance highlights have been converted into United States Dollar

138 ANNUAL REPORT 2015-2016 Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS (CFS) YEAR 2015-16

A: SUBSIDIARIES:

(i) GIC Re South Africa Ltd.

(ii) GIC Re, India, Corporate Member Ltd.

B: ASSOCIATES:

(i) Agriculture Insurance Company of India Ltd.

(ii) GIC Bhutan Re Ltd.

(iii) India International Insurance Pte. Ltd.

ANNUAL REPORT 2015-2016 139 Auditors’ Report

INDEPENDENT AUDITORS’ REPORT ON reasonable and prudent; and the design, CONSOLIDATED FINANCIAL STATEMENTS implementation and maintenance of adequate internal financial controls that were operating To effectively for ensuring the accuracy and The Members of completeness of the accounting records, relevant to GENERAL INSURANCE CORPORATION OF INDIA the preparation and presentation of the financial statements that give a true and fair view and are free 1. Report on the Consolidated Financial Statements from material misstatement, whether due to fraud We have audited the accompanying consolidated or error, which have been used for the purpose of financial statements of General Insurance preparation of the consolidated financial statements Corporation of India “(the Holding Company”) and by the Directors of the Holding Corporation, as its subsidiaries and its associates (collectively aforesaid. referred to as “the Corporation” or “the Group”), which 3. Auditors’ Responsibility comprise the Consolidated Balance Sheet as at March 31, 2016, the Consolidated Revenue Accounts, Our responsibility is to express an opinion on the the Consolidated Statement of Profit and Loss and consolidated financial statements based on our the Consolidated Cash Flow Statement for the year audit. While conducting the audit, we have taken into then ended and a summary of the significant account the provisions of the Act, the accounting and accounting policies and other explanatory auditing standards and matters which are required information (hereinafter referred to as “the to be included in the audit report under the provisions Consolidated Financial Statements”). of the Act and the Rules made there under.

2. Management’s Responsibility for the We conducted our audit in accordance with the Consolidated Financial Statements Standards on Auditing specified under section 143(10) of the Act. Those standards require that we The Holding Corporation’s Board of Directors is comply with ethical requirements and plan and responsible for the preparation of the consolidated perform the audit to obtain reasonable assurance financial statements in terms of the requirements of about whether the consolidated financial statements the Companies Act, 2013 (“the Act”) that give a true are free from material misstatement. and fair view of the consolidated financial position, consolidated financial performance and An audit involves performing procedures to obtain consolidated cash flows of the Corporation in audit evidence about the amounts and the accordance with the accounting principles generally disclosures in the consolidated financial statements. accepted in India, including the Accounting The procedures selected depend on the auditor’s Standards specified under Section 133 of the judgment, including the assessment of the risks of Companies Act, 2013 (hereinafter referred to as “the material misstatement of the consolidated financial Act”) read with Rule 7 of the Companies (Accounts) statements, whether due to fraud or error. In making Rules, 2014. The Board of Directors of the Corporation those risk assessments, the auditor considers internal is responsible for maintenance of adequate financial control relevant to the Holding accounting records in accordance with the Corporation’s preparation of the consolidated provisions of the Act for safeguarding of the assets financial statements that give a true and fair view in of the Corporation and for preventing and detecting order to design audit procedures that are frauds and other irregularities; the selection and appropriate in the circumstances. An audit also application of appropriate accounting policies; includes evaluating the appropriateness of the making judgments and estimates that are accounting policies used and the reasonableness of

140 ANNUAL REPORT 2015-2016 Auditors’ Report

the accounting estimates made by the Holding 6. Reports on Other Legal & Regulatory Corporation’s Board of Directors, as well as evaluating Requirements the overall presentation of the consolidated financial As required by Section 143(3) of the Act, to the extent statements. applicable, we report that:

We believe that the audit evidence obtained by us is (a) We have sought and obtained all the sufficient and appropriate to provide a basis for our information and explanations, which to the best audit opinion on the consolidated financial of our knowledge and beliefs were necessary for statements. the purpose of our audit of the aforesaid 4. Opinion consolidated financial statements.

In our opinion and to the best of our information (b) In our opinion, proper books of account as and according to the explanations given to us, the required by law relating to preparation of the aforesaid consolidated financial statements give the aforesaid consolidated financial statements information required by the Act in the manner so have been kept so far as it appears from our required and give a true and fair view in conformity examination of those books and the reports of with the accounting principles generally accepted the other auditors. in India, of the consolidated state of affairs of the Corporation as at 31st March 2016, and of surplus of (c) The Consolidated Balance Sheet, Consolidated revenue accounts of Fire, Miscellaneous, Marine and Revenue Accounts, the Consolidated Statement Life business and their consolidated profit and their of Profit and Loss, and the Consolidated Cash consolidated cash flows for the year ended on that Flow Statement dealt with by this Report are in date. agreement with the relevant books of account 5. Other Matter maintained for the purpose of preparation of the consolidated financial statements. We did not audit the financial statements of two subsidiaries, whose financial statements reflect total (d) In our opinion, the aforesaid consolidated assets of ` 77,51,770 thousand as at 31st March, 2016, financial statements comply with the total revenues of ` 1,56,461 thousand and net cash Accounting Standards specified under Section flows amounting to ` 13,49,536 thousand for the 133 of the Act, read with Rule 7 of the Companies year ended on that date, as considered in the (Accounts) Rules, 2014. consolidated financial statements. The consolidated financial statements also include the Group’s share (e) With respect to the adequacy of the internal of net profit of ` 13,73,349 thousand for the year financial controls over financial reporting of the ended 31st March, 2016, as considered in the Corporation and the operating effectiveness of consolidated financial statements, in respect of three such controls, refer to our separate Report in associates, whose financial statements have not been “Annexure A”. audited by us. These financial statements have been (f) On the basis of the written representations audited by other auditors whose reports have been furnished to us by the Management and our opinion received from the directors of the Holding st on the consolidated financial statements, in so far as Corporation as on 31 March, 2016 taken on it relates to the amounts and disclosures included in record by the Board of Directors of the Holding respect of these subsidiaries and associates, and our Corporation and the reports of the statutory report in terms of sub-sections (3) and (11) of Section auditors of its subsidiary companies, associate 143 of the Act, in so far as it relates to the aforesaid companies and jointly controlled companies subsidiaries and associates, is based solely on the incorporated in India, none of the directors of reports of the other auditors. the Group companies, its associate companies

ANNUAL REPORT 2015-2016 141 Auditors’ Report

and jointly controlled companies incorporated ii. the Corporation has made provision, as required in India is disqualified as on 31st March, 2016 under the applicable law or accounting from being appointed as a director in terms of standards, for material foreseeable losses, if any, Section 164 (2) of the Act. on long-term contracts including derivative contracts. (g) In our opinion and to the best of our information and according to the explanations given to us: iii. There has been no delay in transferring amounts, required to be transferred, to the Investor i. The consolidated financial statements disclose Education and Protection Fund by the the impact of pending litigations on the Corporation and its subsidiaries incorporated in consolidated financial position of the Group. India.

For, GBCA & Associates For, Samria & Co. Chartered Accountants Chartered Accountants ICAI Firm Regn. No.103142W ICAI Firm Regn. No. 109043W Yogesh Amal Adhar Samria Partner Partner Membership No. 111636 MembeshipNo. 049174 Place : Mumbai Date : June 29, 2016

142 ANNUAL REPORT 2015-2016 Annexure - A to the Auditors’ Report

Annexure - A to the Auditors’ Report controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Report on the Internal Financial Controls under Note require that we comply with ethical requirements Clause (i) of Sub-section 3 of Section 143 of the and plan and perform the audit to obtain reasonable Companies Act, 2013 (“the Act”) assurance about whether adequate internal financial In conjunction with our audit of the consolidated controls over financial reporting was established and financial statements of the Corporation as of and for the maintained and if such controls operated effectively in year ended March 31, 2016, we have audited the internal all material respects. financial controls over financial reporting of General Our audit involves performing procedures to obtain Insurance Corporation of India “(the Holding audit evidence about the adequacy of the internal Corporation”)and its subsidiaries and its associates financial controls system over financial reporting and (collectively referred to as “the Corporation” or their operating effectiveness. Our audit of internal “the Group”) which are companies incorporated in India, financial controls over financial reporting included as of that date. obtaining an understanding of internal financial controls Management’s Responsibility for Internal Financial over financial reporting, assessing the risk that a material Controls weakness exists, and testing and evaluating the design The Respective Board of Directors of the Holding and operating effectiveness of internal control based on Company and its subsidiary companies, which are the assessed risk. The procedures selected depend on companies incorporatedin India, are responsible for the auditor’s judgment, including the assessment of the establishing and maintaining internal financial controls risks of material misstatement of the financial statements, based on the internal control over financial reporting whether due to fraud or error. criteria established by the Company considering the We believe that the audit evidence we have obtained is essential components of internal control stated in the sufficient and appropriate to provide a basis for our audit Guidance Note on Audit of Internal Financial Controls opinion on the Company’s internal financial controls over Financial Reporting issued by the Institute of system over financial reporting. Chartered Accountants of India (“ICAI’). These Meaning of Internal Financial Controls over Financial responsibilities include the design, implementation and Reporting maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and A company’s internal financial control over financial efficient conduct of its business, including adherence to reporting is a process designed to provide reasonable company’s policies, the safeguarding of its assets, the assurance regarding the reliability of financial reporting prevention and detection of frauds and errors, the and the preparation of financial statements for external accuracy and completeness of the accounting records, purposes in accordance with generally accepted and the timely preparation of reliable financial accounting principles. A company’s internal financial information, as required under the Companies Act, 2013. control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of Auditors’ Responsibility records that, in reasonable detail, accurately and fairly Our responsibility is to express an opinion on the reflect the transactions and dispositions of the assets of Corporation’s internal financial controls over financial the company; (2) provide reasonable assurance that reporting based on our audit. We conducted our audit transactions are recorded as necessary to permit in accordance with the Guidance Note on Audit of preparation of financial statements in accordance with Internal Financial Controls over Financial Reporting (the generally accepted accounting principles, and that “Guidance Note”) issued by ICAI and the Standards on receipts and expenditures of the company are being Auditing, issued by ICAI and deemed to be prescribed made only in accordance with authorisations of under section 143(10) of the Companies Act, 2013, to management and directors of the company; and the extent applicable to an audit of internal financial (3) provide reasonable assurance regarding prevention

ANNUAL REPORT 2015-2016 143 Annexure - A to the Auditors’ Report

or timely detection of unauthorised acquisition, use, or Opinion disposition of the company’s assets that could have a In our opinion, the Holding Corporation and its associate material effect on the financial statements. company, which are companies incorporated in India, Inherent Limitations of Internal Financial Controls have, in all material respects, an adequate internal over Financial Reporting financial controls system over financial reporting and such internal financial controls over financial reporting Because of the inherent limitations of internal financial were operating effectively as at March 31, 2016, based controls over financial reporting, including the possibility on the internal control over financial reporting criteria of collusion or improper management override of established by the Company considering the essential controls, material misstatements due to error or fraud components of internal control stated in the Guidance may occur and not be detected. Also, projections of any Note on Audit of Internal Financial Controls Over evaluation of the internal financial controls over financial Financial Reporting issued by the ICAI. reporting to future periods are subject to the risk that the internal financial control over financial reporting may Other Matters become inadequate because of changes in conditions, Our aforesaid reports under section 143(3)(i) of the Act or that the degree of compliance with the policies or on the adequacy and operation effectiveness of the procedures may deteriorate. internal financial control over financial reporting in so far as it relates to an associate which is company incorporated in India, is based on the corresponding information provided by the auditor.

For GBCA & Associates For Samria & Co., Chartered Accountants Chartered Accountants ICAI Firm Regn. No.103142W ICAI Firm Regn. No. 109043W Yogesh Amal Adhar Samria Partner Partner Membership No. 111636 Membership No. 049174 Place : Mumbai Date : June 29,2016

144 ANNUAL REPORT 2015-2016 Comments of the Comptroller and Auditor General of India

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTTON 129(4) OF THE COMPANIES ACT, 2OI3 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF GENERAL INSURANCE CORPORATION OF INDIA FOR THE YEAR ENDED 31 MARCH 2016 The preparation of consolidated financial statements of General lnsurance Corporation of India for the year ended 31 March 2016 in accordance with the financial reporting framework prescribed under the lnsurance Act, 1938 read with the lnsurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor’s Report of lnsurance Companies) Regulations, 2002 and the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under section 139(5) read with Section 129(4) of the Act are responsible for expressing opinion on the financial statements under section 143 read with Section 129(4) of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 29 June 2016. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) read with Section 129(4) of the Act of the consolidated financial statements of General Insurance Corporation of India for the year ended 31 March 2016. We conducted a supplementary audit of the financial statements of General Insurance Corporation of India and Agriculture Insurance Company of India Ltd. but did not conduct supplementary audit of the financial statements of GIC Re South Africa Ltd., GIC Re India Corporate Member Ltd., India International lnsurance Pte. Ltd. and GIC Bhutan Re Ltd. for the year ended on that date. Further, section 139(5) and 143(6)(b) of the Act are not applicable to GIC Re South Africa Ltd., GIC Re India Corporate Member Ltd., India International lnsurance Pte. Ltd. and GIC Bhutan Re Ltd. being entities in corporated in Foreign countries under the respective laws, for appointment of their Statutory Auditor nor for conduct of supplementary audit. Accordingly, C & AG has neither appointed the Statutory Auditors nor conducted the supplementary audit of these companies. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(b) read with Section 129(4) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report: A. Comments on Consolidated Financial Position Balance Sheet Application of Funds Current Assets Advances and Other Assets Schedule 12: ` 15618.11 crore Current Liabilities Schedule 13: ` 30619.60 crore The above included ` 5547.53 crore representing ‘Terrorism Pool (TP) Assets’ and ‘Terrorism Pool (TP) Liabilities’ under Current Assets and Current Liabilities of the Company respectively. The Company is only a Manager to the Indian Market Terrorism Risk Insurance Pool and the TP Assets and the TP Liabilities do not belong to the Company, except to the extent of GIC’s share which is separately reflected in the financial statements. The inclusion of entire TP Assets and TP Liabilities under the head Current Assets and Current Liabilities respectively has resulted in the overstatement of both Current Assets and Current Liabilities by ` 5547.53 crore. For and on the be half of the Comptroller and Auditor General of India

(Roop Rashi) Place : Mumbai Principal Director of Commercial Audit and Dated : 16th September 2016 Ex-officio Member, Audit Board-I, Mumbai

ANNUAL REPORT 2015-2016 145 Management Reply to the Comments of the Comptroller & Auditor General of India

Reply to the Comments of the Comptroller & Auditor General of India under Section 143 (6) (b) of the Companies Act, 2013 on the Consolidated Financial Statements of General Insurance Corporation of India for the year ended 31 March 2016:

The above comment relates to the Accounts of the holding company, General Insurance Corporation of India (GIC Re).

After the WTC terrorist attack in September 2001, the availability of reinsurance protection for Terrorism risk had become very scarce. The Terrorism pool was therefore set up in India w.e.f. 01.04.2002 for writing Terrorism Business in India with GIC Re as the Pool Manager. Since then, GIC Re continues to successfully administer the Pool. Apart from its role as Pool Manager, GIC Re also contributes capacity to the Pool and participates as a reinsurer on the Pool’s excess of loss reinsurance protection.

In the capacity of the Pool administrator, Corporation is having full control over entire assets and liabilities of the Terrorism Pool. As the Pool is only a market arrangement, the funds of the Pool are centrally managed and invested by GIC Re with the agreement of the Pool members, as decided by Underwriting/Investment Committee of the Pool, from time to time.

A statement indicating the member-wise share of the Terrorism Pool funds is sent to the individual Pool members on quarterly basis. At the end of every financial year, the Terrorism Pool Assets Account is prepared and placed before the Terrorism Risk Insurance Pool Members for their confirmation and approval.

The reasons for showing these funds in GIC Re books of accounts can be summarized as follows:

1. It is necessary that the liability of the Pool is protected by adequate reinsurance coverage, in view of the probability of a huge loss due to terrorist activities. Securing a reinsurance protection for Terrorism Pool on standalone basis may be very expensive and challenging for GIC Re as Pool Manager.

2. By showing the Terrorism Pool Assets and Liabilities in GIC Re books of accounts, the Corporation is able to buy reinsurance protection on behalf of the Pool at most competitive rates from the International Market. This is possible on account of GIC Re’s standing in the international market compounded with the financial strength and managerial capacity of GIC Re which is recognized by the Reinsurers worldwide.

3. Further, during statutory and CAG audit of GIC Re Accounts, the matter had been discussed several times with the Auditors and with their cognizance, Corporation has consistently continued with the practice of showing the terrorism pool assets and liabilities in GIC Re books of accounts since the inception of the Pool w.e.f. 01.04.2002.

4. The effect of the Pool funds is nullified in GIC Re books of accounts as the amount of Assets and Liabilities of the Pool is always identical. Further, the assets and liabilities of the Terrorism Pool are not considered for calculation of Solvency Margin, Analytical Ratios etc.

Nevertheless, in view of the latest comments by CAG on this issue, Corporation will examine the matter and initiate consultation and due deliberations with Members of the Pool, Statutory Auditors and other appropriate Authorities etc. Thereafter, GIC Re will accordingly take necessary action in this regard, while finalizing the annual accounts of the Corporation for the year ended 31 March 2017.”

Alice G. Vaidyan Chairman-cum-Managing Director

146 ANNUAL REPORT 2015-2016 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

CONSOLIDATED REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF FIRE INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 46235 952 39840 269 2. Profit on sale of Investments (Net) 3440 837 4634 507 3. Forex Gain/( Loss) 493 701 (206 921) 4. Interest, Dividend & Rent - Gross 5692 524 6218 450 Total (A) 55863 014 50486 305 1. Claims Incurred (Net) 2 35070 446 26635 633 2. Commission (Net) 3 12555 948 9745 045 3. Operating Expenses related to Insurance Business 4 738 349 748 482 4. Expenses relating to Investments 7 577 8 478 5. Premium Deficiency 0 0 Total (B) 48372 320 37137 638 Operating Profit/- Loss from Fire Business C = (A-B) 7490 694 13348 667 APPROPRIATIONS Transfer to Shareholders’ Account 7490 694 13348 667 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 7490 694 13348 667 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Fire Insurance Business have been fully debited in the Fire Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account. As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

ANNUAL REPORT 2015-2016 147 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

CONSOLIDATED REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF MISCELLANEOUS INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 94913 993 85347 395 2. Profit on sale of Investments (Net) 6092 645 7201 777 3. Forex Gain/( Loss) 918 694 (317 983) 4. Interest, Dividend & Rent - Gross 10079 196 9663 225 Total (A) 112004 528 101894 414 1. Claims Incurred (Net) 2 86508 174 81557 919 2. Commission (Net) 3 20622 450 16169 225 3. Operating Expenses related to Insurance Business 4 1059 898 739 608 4. Expenses relating to Investments 13 355 13 178 5. Premium Deficiency 0 0 Total (B) 108203 877 98479 930 Operating Profit/-Loss from Miscellaneous Business C = (A-B) 3800 651 3414 484 APPROPRIATIONS Transfer to Shareholders’ Account 3800 651 3414 484 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 3800 651 3414 484 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Miscellaneous Insurance Business have been fully debited in the Miscellaneous Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account. As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

148 ANNUAL REPORT 2015-2016 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

CONSOLIDATED REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF MARINE INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 9443 297 9356 772 2. Profit on sale of Investments (Net) 989 040 1042 710 3. Forex Gain/( Loss) 152 359 (57 173) 4. Interest, Dividend & Rent - Gross 1636 084 1398 994 Total (A) 12220 780 11741 303 1. Claims Incurred (Net) 2 6330 217 9933 675 2. Commission (Net) 3 1811 133 1995 631 3. Operating Expenses related to Insurance Business 4 79 411 106 147 4. Expenses relating to Investments 2 154 1 904 5. Premium Deficiency -584 596 584 596 Total (B) 7638 319 12621 953 Operating Profit/-Loss from Marine Business C = (A-B) 4582 461 -880 650 APPROPRIATIONS Transfer to Shareholders’ Account 4582 461 -880 650 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 4582 461 -880 650 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Marine Insurance Business have been fully debited in the Marine Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account. As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

ANNUAL REPORT 2015-2016 149 Revenue Account

Registration No. 112 Date of Registration with IRDAI : 2nd April 2001

CONSOLIDATED REVENUE ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 IN RESPECT OF LIFE INSURANCE BUSINESS

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

1. Premiums earned (Net) 1 2411 272 1394 511 2. Profit on sale of Investments (Net) 47 906 48 917 3. Forex Gain/( Loss) 11 253 (2 822) 4. Interest, Dividend & Rent - Gross 83 712 76 287 Total (A) 2554 143 1516 893 1. Claims Incurred (Net) 2 1750 283 986 033 2. Commission (Net) 3 74 359 78 376 3. Operating Expenses related to Insurance Business 4 26 025 64 394 4. Expenses relating to Investments 674 543 5. Premium Deficiency 0 0 Total (B) 1851 341 1129 346 Operating Profit/-Loss from Life Business C = (A-B) 702 802 387 547 APPROPRIATIONS Transfer to Shareholders’ Account 702 802 387 547 Transfer to Catastrophe Reserve 0 0 Transfer to Other Reserves (to be specified) 0 0 Total (C) 702 802 387 547 As required by Section 40C (2) of the Insurance Act, 1938, we certify that, all expenses of management, wherever incurred, whether directly or indirectly, in respect of Life Insurance Business have been fully debited in the Life Insurance Revenue Accounts as expenses. The Schedules referred to above form integral part of the revenue account.

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta Mumbai CFO Company Secretary Dated: 29.06.2016

150 ANNUAL REPORT 2015-2016 Profit & Loss Account

Registration No. 112 Date of Registration with IRDAI : 2nd April, 2001 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2016 Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000) 1. Operating Profit/(Loss) (a) Fire Insurance 7490 694 13348 667 (b) Marine Insurance 4582 460 (880649) (c) Miscellaneous Insurance 3800 651 3414 484 (d) Life Insurance 702 801 387 547 2. Income from Investments (a) Interest, Dividend & Rent - Gross 8317 204 7053 309 (b) Profit on sale of Investments 5087 417 5244 693 Less: Loss of sale of Investment 0 0 3. Other Income: Forex Gain/( Loss) 777 981 (275 688) Profit on sale of Assets (Net) 0 0.00 Sundry Balances Written Back (Net) 0 0 Interest on Income-tax Refund 0 2327 674 (Provision)/Doubtful Debts written back 1573 298 (1075 122) Miscellaneous Receipts 23 340 20 777 Total (A) 32355 846 29565 692 4. Provision for Doubtful Loans & Investment 420 091 32 008 5 (Provision) for Doubtful Debts written back 0.00 0 6 Amortisation of premium on Investments 185 605 181 025 7 Diminution in the value of investments written off 1359 916 588 077 8 Other Expenses : Expenses relating to Investments 13 752 10 281 Loss on Exchange 0 0 Profit/(Loss) on sale of Assets (Net) 223 ( 167) Sundry Balances Written off (Net) 0 0 Interest Motor Pool & Others 7 519 318 005 Corporate Social Responsibility Expenses 490 936 179 481 Total (B) 2478 042 1308 710

ANNUAL REPORT 2015-2016 151 Profit & Loss Account

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

Profit Before Tax 29877 804 28256 982 Provision for Taxation : Current Tax 5123 792 5070 799 Wealth Tax 0 11 359 MAT Credit (1884 959) (3653 300) Deferred Tax 150 425 (107 630) Provision for Tax in respect of earlier years (101 341) 14 713 MAT Credit of earlier year (2205 632) 0 Profit After Tax 28795 519 26921 041 Share of Profit in Asoociates Companies 1373 349 899 846 Profit for the year 30168 868 27820 887 Appropriations (a) Balance brought forward from last year 10493 923 9900 761 (b) Interim dividend 0 0 (c) Proposed Final dividend 8600 000 5632 354 (d) Dividend distribution tax 1750 788 1099 332 (e) Transfer to General Reserve 18133 000 20496 038 Balance carried forward to Balance Sheet 12179 002 10493 923 Basic and Diluted EPS 7.02 6.47

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

152 ANNUAL REPORT 2015-2016 Balance Sheet

Registration No. 112 Date of Registration with IRDAI : 2nd April, 2001

CONSOLIDATED BALANCE SHEET AS AT 31st MARCH 2016

Particulars Schedule Current Year Previous Year (` ‘000) (` ‘000)

SOURCES OF FUNDS Share Capital 5 4300 000 4300 000 Reserves and Surplus 6 166275 413 144256 118 Borrowings 7 0 0 Deferred Tax Liability 0 0 Fair Value Change Account 234514 802 281475 674 Total 405090 215 430031 792 APPLICATION OF FUNDS Investments 8 & 8A 556807 227 567577 368 Loans 9 3657 759 3938 449 Fixed Assets 10 1709 509 1384 489 Goodwill on Consolidation 273 832 273 832 Deferred Tax Asset 51 063 205 670 Current Assets: Cash and Bank Balances 11 97793 636 77488 759 Advances and Other Assets 12 156181 138 145612 226 Sub-Total (A) 253974 774 223100 985 Current Liabilities 13 306196 033 275570 058 Provisions 14 105187 916 90878 943 Sub-Total (B) 411383 949 366449 001 Net Current Assets (C)=(A-B) (157409 175) (143348 016) Miscellaneous Expenditure 15 0 0 Total 405090 215 430031 792 CONTINGENT LIABILITIES 27645 157 30860 684 Schedules referred to above form integral part of the Balance Sheet.

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 153 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

A FIRE INSURANCE Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 65095 823 47478 135 Less: Premium on Reinsurance ceded 12947 195 7616 664 Net Premium 52148 628 39861 471 Adjustment for change in reserve for unexpired risks (5912 676) (21 202) Total Premium Earned (Net) 46235 952 39840 269 B MISCELLANEOUS INSURANCE (1) MOTOR Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 44882 912 38522 946 Less: Premium on Reinsurance ceded 0 0 Net Premium 44882 912 38522 946 Adjustment for change in reserve for unexpired risks (3414 131) (2032 288) Total Premium Earned (Net) 41468 781 36490 658 (2) AVIATION Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 4531 748 6863 948 Less: Premium on Reinsurance ceded 974 129 961 890 Net Premium 3557 619 5902 058 Adjustment for change in reserve for unexpired risks 1148 004 (1179 865) Total Premium Earned (Net) 4705 623 4722 193 (3) ENGINEERING Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 8906 026 7958 220 Less: Premium on Reinsurance ceded 1245 459 854 396 Net Premium 7660 567 7103 824 Adjustment for change in reserve for unexpired risks (310 661) 281 556 Total Premium Earned (Net) 7349 906 7385 380

154 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(4) WORKMENS’ COMPENSATION Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 253 526 182 702 Less: Premium on Reinsurance ceded 0 0 Net Premium 253 526 182 702 Adjustment for change in reserve for unexpired risks (35 433) 30 085 Total Premium Earned (Net) 218 093 212 787 (5) LIABILITY Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 1505 296 1153 477 Less: Premium on Reinsurance ceded 89 047 116 619 Net Premium 1416 249 1036 858 Adjustment for change in reserve for unexpired risks (190 201) (80 778) Total Premium Earned (Net) 1226 048 956 080 (6) PERSONAL ACCIDENT Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 3805 190 2691 267 Less: Premium on Reinsurance ceded 5 142 11 685 Net Premium 3800 048 2679 582 Adjustment for change in reserve for unexpired risks (575 996) 559 125 Total Premium Earned (Net) 3224 052 3238 707 (7) HEALTH Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 25041 895 21049 810 Less: Premium on Reinsurance ceded 0 0 Net Premium 25041 895 21049 810 Adjustment for change in reserve for unexpired risks (1990 028) (2383 824) Total Premium Earned (Net) 23051 867 18665 986

ANNUAL REPORT 2015-2016 155 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(8) OTHER MISCELLANEOUS Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 16943 188 12581 096 Less: Premium on Reinsurance ceded 2808 719 1772 572 Net Premium 14134 469 10808 524 Adjustment for change in reserve for unexpired risks (1850 101) 866 648 Total Premium Earned (Net) 12284 368 11675 172 (9) FINANCIAL LIABILTY/CREDIT Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 1766 695 1455 353 Less: Premium on Reinsurance ceded 450 000 0 Net Premium 1316 695 1455 353 Adjustment for change in reserve for unexpired risks 68 560 545 079 Total Premium Earned (Net) 1385 255 2000 432 TOTAL MISCELLANEOUS Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 107636 476 92458 819 Less: Premium on Reinsurance ceded 5572 496 3717 162 Net Premium 102063 980 88741 657 Adjustment for change in reserve for unexpired risks (7149 987) (3394 262) Total Premium Earned (Net) 94913 993 85347 395 C MARINE INSURANCE (1) MARINE CARGO Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 3470 179 3863 117 Less: Premium on Reinsurance ceded 461 193 277 104 Net Premium 3008 986 3586 013 Adjustment for change in reserve for unexpired risks 516 330 194 103 Total Premium Earned (Net) 3525 316 3780 116

156 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 1 PREMIUM EARNED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(2) MARINE HULL Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 6756 228 7217 036 Less: Premium on Reinsurance ceded 1225 493 1282 284 Net Premium 5530 735 5934 752 Adjustment for change in reserve for unexpired risks 387 247 (358 096) Total Premium Earned (Net) 5917 982 5576 656 TOTAL MARINE Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 10226 407 11080 153 Less: Premium on Reinsurance ceded 1686 686 1559 388 Net Premium 8539 721 9520 765 Adjustment for change in reserve for unexpired risks 903 577 (163 993) Total Premium Earned (Net) 9443 298 9356 772 D LIFE INSURANCE Premium from Direct Business written 0 0 Add: Premium on Reinsurance accepted 2383 760 1684 465 Less: Premium on Reinsurance ceded 432 025 419 400 Net Premium 1951 735 1265 065 Adjustment for change in reserve for unexpired risks 459 537 129 446 Total Premium Earned (Net) 2411 272 1394 511 E TOTAL ALL CLASSES Premium from Direct Business Written 0 0 Add: Premium on Reinsurance accepted 185342 466 152701 572 Less: Premium on Reinsurance ceded 20638 402 13312 614 Net Premium 164704 064 139388 958 Adjustment for change in reserve for unexpired risks (11699 549) (3450 011) Total Premium Earned (Net) 153004 515 135938 947

ANNUAL REPORT 2015-2016 157 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

A FIRE INSURANCE Claims Paid Direct 0 0 Add: Reinsurance accepted 37610 929 36729 315 Less: Reinsurance ceded 7896 159 1563 411 Net Claims Paid 29714 770 35165 904 Add: Claims Outstanding at the end of the year 72946 184 67685 299 Less: Claims Outstanding at the beginning of the year 67590 508 76215 570 Total Claims Incurred 35070 446 26635 633 B MISCELLANEOUS INSURANCE (1) MOTOR Claims Paid Direct 0 0 Add: Reinsurance accepted 29418 461 41344 945 Less: Reinsurance ceded 0 0 Net Claims Paid 29418 461 41344 945 Add: Claims Outstanding at the end of the year 61161 102 51587 884 Less: Claims Outstanding at the beginning of the year 51587 884 54058 415 Total Claims Incurred 38991 679 38874 414 (2) AVIATION Claims Paid Direct (11 700) 4 057 Add: Reinsurance accepted 3901 682 3324 259 Less: Reinsurance ceded 332 185 143 556 Net Claims Paid 3557 797 3184 760 Add: Claims Outstanding at the end of the year 8550 135 8803 936 Less: Claims Outstanding at the beginning of the year 8803 936 7900 822 Total Claims Incurred 3303 996 4087 874

158 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(3) ENGINEERING Claims Paid Direct 0 0 Add: Reinsurance accepted 4392 151 3889 855 Less: Reinsurance ceded 164 800 17 234 Net Claims Paid 4227 351 3872 621 Add: Claims Outstanding at the end of the year 16497 841 18382 485 Less: Claims Outstanding at the beginning of the year 18382 485 17748 578 Total Claims Incurred 2342 707 4506 528 (4) WORKMENS’ COMPENSATION Claims Paid Direct 0 0 Add: Reinsurance accepted 89 996 79 206 Less: Reinsurance ceded 0 0 Net Claims Paid 89 996 79 206 Add: Claims Outstanding at the end of the year 210 187 161 463 Less: Claims Outstanding at the beginning of the year 161 463 163 235 Total Claims Incurred 138 720 77 434 (5) LIABILITY Claims Paid Direct 0 0 Add: Reinsurance accepted 436 967 243 887 Less: Reinsurance ceded 0 38 252 Net Claims Paid 436 967 205 635 Add: Claims Outstanding at the end of the year 1726 140 1579 545 Less: Claims Outstanding at the beginning of the year 1579 545 1842 666 Total Claims Incurred 583 562 (57 486)

ANNUAL REPORT 2015-2016 159 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(6) PERSONAL ACCIDENT Claims Paid Direct 0 0 Add: Reinsurance accepted 1443 703 2586 724 Less: Reinsurance ceded 0 0 Net Claims Paid 1443 703 2586 724 Add: Claims Outstanding at the end of the year 2015 981 1888 768 Less: Claims Outstanding at the beginning of the year 1888 768 2406 549 Total Claims Incurred 1570 916 2068 943 (7) HEALTH Claims Paid Direct 0 0 Add: Reinsurance accepted 21544 530 17748 458 Less: Reinsurance ceded 0 0 Net Claims Paid 21544 530 17748 458 Add: Claims Outstanding at the end of the year 12428 273 12700 829 Less: Claims Outstanding at the beginning of the year 12700 829 9158 105 Total Claims Incurred 21271 974 21291 182 (8) OTHER MISCELLANEOUS Claims Paid Direct 0 0 Add: Reinsurance accepted 16974 816 9304 343 Less: Reinsurance ceded 1129 986 0 Net Claims Paid 15844 830 9304 343 Add: Claims Outstanding at the end of the year 9999 821 9811 725 Less: Claims Outstanding at the beginning of the year 9760 096 10395 788 Total Claims Incurred 16084 555 8720 280

160 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(9) FINANCIAL LIABILTY/CREDIT Claims Paid Direct 0 0 Add: Reinsurance accepted 1995 532 1225 730 Less: Reinsurance ceded 0 0 Net Claims Paid 1995 532 1225 730 Add: Claims Outstanding at the end of the year 6872 775 6648 242 Less: Claims Outstanding at the beginning of the year 6648 242 5885 222 Total Claims Incurred 2220 065 1988 750 TOTAL MISCELLANEOUS Claims Paid Direct (11 700) 4 057 Add: Reinsurance accepted 80197 838 79747 407 Less: Reinsurance ceded 1626 971 199 042 Net Claims Paid 78559 167 79552 422 Add: Claims Outstanding at the end of the year 119462 255 111564 877 Less: Claims Outstanding at the beginning of the year 111513 248 109559 380 Total Claims Incurred 86508 174 81557 919 C MARINE INSURANCE (1) MARINE CARGO Claims Paid Direct 0 0 Add: Reinsurance accepted 1872 029 3274 157 Less: Reinsurance ceded 58 708 62 823 Net Claims Paid 1813 321 3211 334 Add: Claims Outstanding at the end of the year 5906 120 5576 499 Less: Claims Outstanding at the beginning of the year 5562 583 5230 798 Total Claims Incurred 2156 858 3557 035

ANNUAL REPORT 2015-2016 161 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 2 CLAIMS INCURRED (NET)

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(2) MARINE HULL Claims Paid Direct 0 0 Add: Reinsurance accepted 4630 060 4242 795 Less: Reinsurance ceded 516 246 309 043 Net Claims Paid 4113 814 3933 752 Add: Claims Outstanding at the end of the year 9740 973 9681 428 Less: Claims Outstanding at the beginning of the year 9681 428 7238 540 Total Claims Incurred 4173 359 6376 640 TOTAL MARINE Claims Paid Direct 0 0 Add: Reinsurance accepted 6502 089 7516 952 Less: Reinsurance ceded 574 954 371 866 Net Claims Paid 5927 135 7145 086 Add: Claims Outstanding at the end of the year 15647 093 15257 927 Less: Claims Outstanding at the beginning of the year 15244 011 12469 338 Total Claims Incurred 6330 217 9933 675 D LIFE INSURANCE Claims Paid Direct 0 0 Add: Reinsurance accepted 1898 958 1082 099 Less: Reinsurance ceded 344 708 351 647 Net Claims Paid 1554 250 730 452 Add: Claims Outstanding at the end of the year 1056 139 861 050 Less: Claims Outstanding at the beginning of the year 860 106 605 469 Total Claims Incurred 1750 283 986 033 E TOTAL ALL CLASSES Claims Paid Direct (11 700) 4 057 Add: Reinsurance accepted 126209 814 125075 773 Less: Reinsurance ceded 10442 792 2485 966 Net Claims Paid 115755 322 122593 864 Add: Claims Outstanding at the end of the year 209111 671 195369 153 Less: Claims Outstanding at the beginning of the year 195207 873 198849 757 Total Claims Incurred 129659 120 119113 260

162 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

A FIRE INSURANCE Commission Paid Direct 0 0 Add: Reinsurance Accepted 12675 662 9918 217 Less: Commission on Reinsurance Ceded 119 714 173 172 Net Commission 12555 948 9745 045 Break-up of Commission Brokerage 2406 922 1359 923 Commision Paid 10149 026 8385 122 Total Commission 12555 948 9745 045 B MISCELLANEOUS INSURANCE (1) MOTOR Commission Paid Direct 0 0 Add: Reinsurance Accepted 8218 799 6499 826 Less: Commission on Reinsurance Ceded 0 0 Net Commission 8218 799 6499 826 Break-up of Commission Brokerage 341 300 252 380 Commision Paid 7877 499 6247 446 Total Commission 8218 799 6499 826 (2) AVIATION Commission Paid Direct 0 (78 261) Add: Reinsurance Accepted 731 955 955 853 Less: Commission on Reinsurance Ceded 24 799 583 Net Commission 707 156 877 009 Break-up of Commission Brokerage 343 032 373 701 Commision Paid 364 124 503 308 Total Commission 707 156 877 009

ANNUAL REPORT 2015-2016 163 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(3) ENGINEERING Commission Paid Direct 0 0 Add: Reinsurance Accepted 2044 958 1971 232 Less: Commission on Reinsurance Ceded 15 676 3 506 Net Commission 2029 282 1967 726 Break-up of Commission Brokerage 129 162 92 753 Commision Paid 1900 120 1874 973 Total Commission 2029 282 1967 726 (4) WORKMENS’ COMPENSATION Commission Paid Direct 0 0 Add: Reinsurance Accepted 37 785 27 023 Less: Commission on Reinsurance Ceded 0 0 Net Commission 37 785 27 023 Break-up of Commission Brokerage 1 642 1 619 Commision Paid 36 143 25 404 Total Commission 37 785 27 023 (5) LIABILITY Commission Paid Direct 0 0 Add: Reinsurance Accepted 206 293 190 262 Less: Commission on Reinsurance Ceded 0 2 094 Net Commission 206 293 188 168 Break-up of Commission Brokerage 22 141 15 511 Commision Paid 184 152 172 657 Total Commission 206 293 188 168

164 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(6) PERSONAL ACCIDENT Commission Paid Direct 0 0 Add: Reinsurance Accepted 1350 952 561 284 Less: Commission on Reinsurance Ceded 26 1 580 Net Commission 1350 926 559 704 Break-up of Commission Brokerage 47 068 44 091 Commision Paid 1303 858 515 613 Total Commission 1350 926 559 704 (7) HEALTH Commission Paid Direct 0 0 Add: Reinsurance Accepted 5150 064 3699 443 Less: Commission on Reinsurance Ceded 0 0 Net Commission 5150 064 3699 443 Break-up of Commission Brokerage 162 692 264 056 Commision Paid 4987 372 3435 387 Total Commission 5150 064 3699 443 (8) OTHER MISCELLANEOUS Commission Paid Direct 0 0 Add: Reinsurance Accepted 2769 037 2096 597 Less: Commission on Reinsurance Ceded 151 632 1 478 Net Commission 2617 405 2095 119 Break-up of Commission Brokerage 121 131 94 832 Commision Paid 2496 274 2000 287 Total Commission 2617 405 2095 119

ANNUAL REPORT 2015-2016 165 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(9) FINANCIAL LIABILTY/CREDIT Commission Paid Direct 0 0 Add: Reinsurance Accepted 304 740 255 207 Less: Commission on Reinsurance Ceded 0 0 Net Commission 304 740 255 207 Break-up of Commission Brokerage 4 813 2 267 Commision Paid 299 927 252 940 Total Commission 304 740 255 207 TOTAL MISCELLANEOUS Commission Paid Direct 0 (78 261) Add: Reinsurance Accepted 20814 583 16256 727 Less: Commission on Reinsurance Ceded 192 133 9 241 Net Commission 20622 450 16169 225 Break-up of Commission Brokerage 1172 981 1141 210 Commision Paid 19449 469 15028 015 Total Commission 20622 450 16169 225 C MARINE INSURANCE (1) MARINE CARGO Commission Paid Direct 0 0 Add: Reinsurance Accepted 732 763 907 180 Less: Commission on Reinsurance Ceded 26 572 34 Net Commission 706 191 907 146 Break-up of Commission Brokerage 87 697 74 699 Commision Paid 618 494 832 446 Total Commission 706 191 907 145

166 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 3 COMMISSION

Particulars Current Year Previous Year (` ‘000) (` ‘000)

(2) MARINE HULL Commission Paid Direct 0 0 Add: Reinsurance Accepted 1222 828 1166 143 Less: Commission on Reinsurance Ceded 117 886 77 658 Net Commission 1104 942 1088 485 Break-up of Commission Brokerage 363 841 257 021 Commision Paid 741 101 831 465 Total Commission 1104 942 1088 486 TOTAL MARINE Commission Paid Direct 0 0 Add: Reinsurance Accepted 1955 591 2073 323 Less: Commission on Reinsurance Ceded 144 458 77 692 Net Commission 1811 133 1995 631 Break-up of Commission Brokerage 451 538 331 720 Commision Paid 1359 595 1663 911 Total Commission 1811 133 1995 631 D LIFE INSURANCE Commission Paid Direct 0 0 Add: Reinsurance Accepted 77 536 85 389 Less: Commission on Reinsurance Ceded 3 178 7 013 Net Commission 74 358 78 376 Break-up of Commission Brokerage 17 850 10 531 Commision Paid 56 508 67 845 Total Commission 74 358 78 376 E TOTAL ALL CLASSES Commission Paid Direct 0 (78 261) Add: Reinsurance Accepted 35523 372 28333 656 Less: Commission on Reinsurance Ceded 459 483 267 118 Net Commission 35063 889 27988 277 Break-up of Commission Brokerage 4049 291 2843 384 Commision Paid 31014 598 25144 893 Total Commission 35063 889 27988 277

ANNUAL REPORT 2015-2016 167 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 4 OPERATING EXPENSES RELATED TO INSURANCE BUSINESS

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 Employees’ remuneration & welfare benefits 902 407 707 551 2 Travel, conveyance and vehicle running expenses 93 414 71 027 3 Training expenses 23 696 10 059 4 Rents, rates and taxes 70 572 47 549 5 Repairs 223 579 214 306 6 Printing & stationery 3 152 3 111 7 Communication 13 257 12 271 8 Legal & professional charges 66 283 153 652 9 Auditors’ fees, expenses etc. (a) as auditor 11 190 11 875 (b) as advisor or in any other capacity, in respect of (i) Taxation matters 300 300 (ii) Others 2 5 10 Advertisement and publicity 56 192 48 995 11 Interest & Bank Charges 12 992 8 671 12 Others 202 710 174 902 13 Depreciation 98 110 94 021 14 Service Tax A/c 4 557 5 131 15 IT Expenses 121 269 95 205 Total 1903 682 1658 631

168 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 5 SHARE CAPITAL

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 Authorised Capital 10,00,00,00,000 Equity Shares of ` 1/- Each 10000 000 10000 000 2 Issued & Subscribed Capital 4,30,00,00,000 Equity Shares of ` 1/- Each 4300 000 4300 000 3 Called-up Capital 4,30,00,00,000 Equity Shares of ` 1/- Each 4300 000 4300 000 (Includes 4,06,00,00,000 shares of ` 1/ issued by capitalisation of Capital Redemption Reserve and General Reserve and 5,00,00,000 partly paid shares (` 0.50 per share paid) made fully paid-up shares by capitalisation of General Reserve) Total 4300 000 4300 000

SCHEDULE 5A SHARE CAPITAL PATTERN OF SHAREHOLDING [As certified by the Management]

Shareholders Current Year Previous Year Number of Shares % of Holding Number of Shares % of Holding Promoters Indian 4,30,00,00,000 100% 4,30,00,00,000 100% The Shareholders of the corporation have approved the sub-division of each equity share having face value of ` 100/- into 100 equity shares having face value of ` 1 each. All shares and per share. information in the financial results reflect the effect of sub-division for each of the period presented. SCHEDULE 6 RESERVES AND SURPLUS

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 General Reserve Opening Balance 125948 038 105452 000 Add : Transfer from Profit & Loss A/c 18133 000 20496 038 144081 038 125948 038 2 Catastrophe Reserve 0 0 3 Foreign Currency Translation Reserve 10016 594 7868 586 4 Transfer to reserve revaluation on inv (1 222) (54 429) 5 Balance of Profit in Profit & Loss Account 12179 003 10493 923 Total 166275 413 144256 118 SCHEDULE 7 BORROWINGS N I L

ANNUAL REPORT 2015-2016 169 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 8 INVESTMENTS - SHAREHOLDERS’ FUND

Particulars Current Year Previous Year (` ‘000) (` ‘000) Long Term Investments 1 Government securities and Government guaranteed 37039 988 29879 607 bonds including Treasury Bills 2 Other Approved Securities 1088 215 1160 091 3 Other Investments (a) Shares (aa) Equity - Indian 94491 125 95915 057 Equity - Foreign 569 499 7 816 (bb) Preference 12 897 11 523 (b) Mutual Funds 0 0 (c) Derivative Instruments 0 0 (d) Debentures/Bonds Indian 8021 383 6019 815 Debentures/Bonds Foreign 0 0 (e) Other Securities Guaranteed Equity 162 (734 446) (f) Subsidiaries 0 734 591 (e) Associates - Indian 0 0 Associates - Foreign 3477 328 3830 994 4 Investments in Infrastructure and Social Sector 0 0 (a) Equity 4510 029 4586 044 (b) Debentures/Bonds 17827 480 10679 309 5 Other than Approved Investments 0 0 (a) Equity/Preference/Debentures/Venture Funds 1609 749 1176 154 (b) Preference 9 540 8 508 (c) Debentures/Bond 2871 379 5886 076 (d) Venture Funds 602 726 512 372 (e) Associate Indian 9252 226 8262 198 Short Term Investments 1 Government securities and Government guaranteed 2972 264 814 669 bonds including Treasury Bills 2 Other Approved Securities 203 949 111 719 3 Other Investments (a) Shares (aa) Equity 0 0 (bb) Preference 0 0 (b) Mutual Funds 929 728 528 523 (c) Derivative Instruments 0 0 (d) Debentures/Bond Indian 1133 904 764 367 Debentures/Bond Foreign 0 0 (e) Other Securities 0 0 Commercial Paper 0 0 (f) Subsidiaries 0 0 (g) Associates - Indian 0 0 Associates - Foreign 0 0 4 Investments in Infrastructure and Social Sector 0 0 (a) Debentures/Bond 2094 775 1617 867 5 Other than Approved Investments 0 0 (a) Preference Shares 0 0 (b) Debentures/Bond 740 204 581 788 (c) Mutual Funds 0 0 Total 189458 550 172354 642

170 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 8 A INVESTMENTS - POLICYHOLDERS’ FUND

Particulars Current Year Previous Year (` ‘000) (` ‘000) Long Term Investments 1 Government securities and Government guaranteed 77110 527 73677 602 bonds including Treasury Bills 2 Other Approved Securities 2462 232 3136 974 3 Other Investments (a) Shares (aa) Equity - Indian 196340 285 236315 830 Equity - Foreign 18 009 9 128 (bb) Preference 26 799 28 390 (b) Mutual Funds 19 672 21 370 (c) Derivative Instruments 0 0 (d) Debentures/Bonds Indian 17594 527 14831 640 Debentures/Bonds Foreign 0 0 (e) Other Securities Guaranteed Equity 338 356 (f) Subsidiaries 0 0 (g) Associates - Indian 0 0 Associates - Foreign 0 0 4 Investments in Infrastructure and Social Sector (a) Equity 9371 255 11299 110 (b) Debentures/Bonds 37043 188 26311 716 5 Other than Approved Investments (a) Equity/Preference/Debentures/Venture Funds 3344 850 2897 812 (b) Preference 19 822 20 960 (c) Debentures/Bond 5966 353 14502 133 (d) Venture Funds 1252 386 1262 384 (e) Associate Indian 0 0 Short Term Investments 1 Government securities and Government guaranteed 6175 978 2007 185 bonds including Treasury Bills 2 Other Approved Securities 423 779 295 192 3 Other Investments (a) Shares (aa) Equity 0 0 (bb) Preference 0 0 (b) Mutual Funds 1931 854 1302 178 (c) Derivative Instruments 0 0 (d) Debentures/Bond Indian 2356 106 1883 249 Debentures/Bond Foreign 0 0 (e) Other Securities 0 0 Commercial Paper 0 0 (f) Subsidiaries 0 0 (g) Associates - Indian 0 0 Associates - Foreign 0 0 4 Investments in Infrastructure and Social Sector (a) Debentures/Bond 4352 670 3986 106 5 Other Investments (a) Preference Shares 0 0 (b) Debentures/Bond 1538 047 1433 411 (c) Mutual Funds 0 0 Total 367348 677 395222 726

ANNUAL REPORT 2015-2016 171 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 9 LOANS

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Security-wise Classification Secured (a) On mortgage of property (aa) In India * 735 423 757 974 (bb) Outside India 0 0 (b) On Shares, Bonds, Government Securities 0 0 (c) Investments In State Govt. Loans for Housing and Fire fighting 2853 949 3112 087 Unsecured 68 387 68 388 Total 3657 759 3938 449 2 Borrower-Wise Classification (a) Central and State Governments 2853 949 3112 087 (b) Banks and Financial Institutions 0 0 (c) Subsidiaries 0 0 (d) Industrial Undertakings 782 984 816 556 (e) Others 20 826 9 806 Total 3657 759 3938 449 3 Performance-Wise Classification (a) Loans classified as standard (aa) In India 2955 623 3075 668 (bb) Outside India 0 0 (b) Non-performing loans less provisions (aa) In India 0 191 648 (bb) Outside India 0 0 Provisions ** 702 136 671 133 Total 3657 759 3938 449 4 Maturity-Wise Classification (a) Short - Term 296 986 331 193 (b) Long - Term 3360 773 3607 256 Total 3657 759 3938 449 ** Includes Provision for Bad and Doubtful Loans

172 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 10 FIXED ASSETS (` ‘000) Cost/Gross Block Depreciation Net Block Particulars As at Additions Deductions As at Upto Tweleve On Sales/ Upto As at As at 01.04.2015 31.03.2016 31.03.2015 months Adjust 31.03.2016 31.03.2016 31.03.2015 ended ment 31.03.2016 Leasehold Land 247 253 - - 247 253 85 851 3 434 - 89 285 157 968 161 402 Freehold Land 560 132 - - 560 132 - - - - 560 132 560 132 Buildings 611 494 393 222 - 1004 716 238 217 11 441 - 249 658 755 058 373 277 Furniture & Fittings 25 183 191 149 25 225 21 244 658 104 21 798 3 427 4 146 I.T. Equipments 127 381 7 164 578 133 967 109 513 8 629 530 117 612 16 355 18 103 I.T. Software 343 164 12 533 - 355 697 112 942 65 260 - 178 202 177 495 230 222 Vehicles 48 143 11 599 3 627 56 115 20 002 5 804 1 950 23 856 32 259 28 689 Office Equipments 19 658 1 009 32 20 635 12 393 2 559 43 14 909 5 726 7 381 AC & Water Coolers 12 523 185 22 12 686 11 694 110 7 11 797 889 829 Elevators 2 073 - - 2 073 2 073 - - 2 073 - - Canteen Appliances 474 - - 474 363 31 - 394 80 111 Electrical Installation 11 769 25 1796 9 998 11 572 37 1731 9 878 120 197 Fire Alarm Systems 3 408 - - 3 408 3 408 - - 3 408 -- Total 2012 655 425 928 6 204 2432 379 629 272 97 963 4 365 722 870 1709 509 1384 489 Previous years 1674 419 327 081 5 117 1996 383 531 316 92 463 3 666 620 113

SCHEDULE 11 CASH AND BANK BALANCES

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Cash & stamps 140 347 2 Bank Balances (a) Deposit Accounts - Short term (due within 12 months) 85294 228 66651 121 (b)Current Accounts 4749 627 2480 007 3 Money at Call and Short Notice (a) With Bank 334 179 388 498 (b)With other Institutions 7415 461 7968 786 Total 97793 636 77488 759 Balances with non-scheduled banks Nil Nil

ANNUAL REPORT 2015-2016 173 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 12 ADVANCES AND OTHER ASSETS

Particulars Current Year Previous Year (` ‘000) (` ‘000)

Advances 1 Reserve Deposits with Ceding Companies 32346 246 26771 754 2 Application Money for Investments 0 0 3 Prepayments 80 298 78 376 4 Advances to Directors/Officers 5 165 5 258 5 Advance Tax Paid and TDS 11864 950 12592 152 Less: Provision for Taxation 10264 986 6768 350 1599 964 5823 802 6 Service Tax & Others 2920 696 2396 021 7 Deferred Commission 541 799 460 161 Total (A) 37494 168 35535 372 Other Assets 1 Income accrued on investments 8267 277 7550 171 2 Due from other entities carrying on insurance 38934 185 39409 820 business (including reinsurers) * 3 Deposit U/S-7 of Insurance Act 0 295 314 4 Sundry Debtors 175 695 3405 392 5 Sundry Deposits 360 558 289 644 6 MAT Credit Entitlement 15045 407 10954 816 7 Service Tax Unutilised Credit 428 530 343 261 8 Terrorism Pool Assets 55475 318 47828 436 Total (B) 118686 970 110076 854 Total (A+B) 156181 138 145612 226 * Net of ` 23,61,895 thousand (PY ` 3,935,192 thousand) for provision for bad and doubtful debts

SCHEDULE 13 CURRENT LIABILITIES

Particulars Current Year Previous Year (` ‘000) (` ‘000) 1 Balances Due to other insurance companies 19392 591 16326 221 2 Deposits held on re-insurance ceded 20022 801 14955 081 3 Sundry Creditors 778 866 662 468 4 Claims Outstanding 210526 459 195797 852 5 LPA Liabilities 0 0 5 Service Tax Liability 0 0 5 Terrorism Pool Liabilities 55475 318 47828 436 Total 306196 033 275570 058

174 ANNUAL REPORT 2015-2016 Schedules Forming Part of Consolidated Financial Statements For the Year Ended 31st March 2016

SCHEDULE 14 PROVISIONS

Particulars Current Year Previous Year (` ‘000) (` ‘000)

1 Reserve for Unexpired Risk 87346 906 75790 576 2 Reserve for Premium Deficiency 0 584 595 3 For proposed dividends 8600 000 5400 000 4 For dividend distribution tax 1750 788 1099 332 5 For Doubtful Loans, Investment and Debts 5313 238 6471 674 6 For Leave Encashment 245 182 227 340 7 Provision for Pension 93 973 31 109 8 Provision for Gratuity 33 473 75 675 9 Provision for Settlement 14 024 12 195 10 For Salary Arrears 0 130 000 11 For PLLI Arrears 0 16 800 12 Provision for Taxation 12355 436 14577 848 Less: Advance Tax Paid and TDS 10565 103 13538 201 1790 333 1039 647 Total 105187 916 90878 943

SCHEDULE 15 MISCELLANEOUS EXPENDITURE

N I L

ANNUAL REPORT 2015-2016 175 Significant Accounting Policies on Consolidated Financial Statements

SIGNIFICANT ACCOUNTING POLICIES AND NOTES Corporation”), its subsidiary companies and the FORMING PART OF CONSOLIDATED FINANCIAL Corporation’s share of profit/loss in its associate STATEMENTS (CFS) AS ON 31ST MARCH 2016. companies (together referred as the group). The list of subsidiary companies and associates which are I. SIGNIFICANT ACCOUNTING POLICIES: included in the consolidation of financial 1. Principles of Consolidation: statements are as under: The consolidated financial statements relate to General Insurance Corporation of India (“the Sr.No. Name of the company Ownership % Country of incorporation

Subsidiaries

1. GIC Re South Africa Ltd. 100 Johannesburg, SA

2. GIC Re India Corporate Member Ltd. 100 London, U.K.

Associates

1. Agriculture Insurance Company of India Ltd. 35 India

2. Indian International Insurance Pte. Ltd. 20 Singapore

3. GIC Bhutan Re Ltd. 26 Bhutan The consolidated financial statements have been prepared on the following basis: 1.1 The financial statements of the Corporation and of investment) has been added to/deducted its subsidiary companies have been combined from the cost of investments. The carrying value on a line-by-line basis by adding together the is reduced for the distributions received from value of like items of assets, liabilities, income the associates. and expenses after eliminating intra-group 1.4 The difference between the cost of investment balances and intra-group transactions and in the associate and the share of net assets at resulting profits or losses (unless cost cannot be the time of acquisition of shares in the associate recovered) in accordance with Accounting is described as Goodwill or Capital Reserve as Standard (AS) 21 - “Consolidated Financial the case may be. Goodwill or Capital Reserve is Statements”. included in the carrying amount of investment 1.2 The difference between the costs of investment in associate. in the subsidiaries over the net assets at the time 1.5 The Corporation accounts for its share in the of acquisition of shares in the subsidiaries is change in the net assets of the associate, post- recognised in the financial statements as acquisition, after eliminating unrealised profits Goodwill or Capital Reserve on Consolidation and losses resulting from the transaction as the case may be. The ‘Goodwill’/‘Capital between the Corporation and its associate to Reserve’ is determined separately for each the extent of its share, through its statement of subsidiary company. profit and loss to the extent such change is 1.3 Investments in Associate Companies are attributable to the associates’ Statement of accounted for using equity method in Profit and Loss. accordance with Accounting Standard (AS) 23 - 1.6 Financial Statements of Foreign Subsidiaries, “Accounting for Investments in Associates in being non integral operations, have been consolidated financial statements”. Accordingly, converted in Indian Rupees at following the share of profit/loss of each of the associate exchange rates - (i) Revenue and Expenses : At companies (the loss being restricted to the cost the average of the year (ii) Assets and Liabilities : At

176 ANNUAL REPORT 2015-2016 Significant Accounting Policies on Consolidated Financial Statements

the end of the year. The resultant translation comply with the Generally Accepted Accounting exchange difference is transferred to “Foreign Principles in India (Indian GAAP), including the Currency Translation Reserve”. The financial Accounting Standards notified under the relevant statements of the Subsidiaries and Associates provisions of the Companies Act, 2013. The financial used in the consolidation are drawn up to the statements also conform to the stipulation specified same reporting date as that of the Corporation under the Insurance Regulatory and Development i.e. March 31, 2016 or up to 31st December 2015 Authority (Preparation of Financial Statements and in case where the subsidiaries or associates Auditors Report of Insurance Companies) close their financial year on that date. Regulations, 2002. The said statements are prepared on historical cost convention and on accrual basis 1.7 The subsidiaries of GIC Re have prepared the except as otherwise stated and conform to the accounts in accordance with International statutory provisions and practices prevailing in the Financial Reporting Standards (IFRS)/UK General Insurance Industry in India. Generally Accepted Accounting Principles (GAAP) as per the required local laws of the 3 REINSURANCE BUSINESS respective country. For the purpose of preparing 3.1 Reinsurance Revenues the CFS, to the extent possible, accounting adjustments have been made to align the 3.1.1 Premium is accounted based on accounts accounts of the subsidiaries to confirm to the rendered by ceding companies upon receipt of accounting polices followed by the Corporation. accounts. At the year end, estimates are made for accounts not yet received, based on available 1.8 Following are the material differences with the information and current trends. accounting policies followed by the Corporation: 3.1.2 In respec t of Indian Market Terrorism Risk 1.8.1 Unexpired risk reserve – GIC Re South Africa Insurance pool and Indian Motor Declined Pool, Ltd. has calculated Unexpired Risk Reserve only the Corporation’s share of revenues is (URR) at 50% on treaty business and 1/365th recorded as premium. method for facultative business. No provision 3.2 Outstanding claims for URR is required by GIC Re India Corporate Member Ltd. since the subsidiary reinsures all 3.2.1 Estimated liability for outstanding claims in of its underwriting business to GIC Re. respect of Reinsurance business is based on advices received as of different dates up to the 1.8.2 IBNR rates for the different segments of date of finalization of accounts and wherever business are provided by the Regulator. such advices are not received, on estimates No provision for IBNR is required by GIC Re based on available information, current trends, India Corporate Member Ltd. since the past underwriting experience of the subsidiary reinsures all of its underwriting management and actuarial estimation bases. business to GIC Re. 3.2.2 Provision for claims incurred but not 1.8.3 Provision for taxation including deferred reported (IBNR) is made as certified by the tax is accounted as per local tax laws and in appointed actuary. accordance with the provisions of local GAAP. 3.3 Receivables 1.8.4 Statutory Reserves are created in accordance Provisions for doubtful debts for receivables are with the requirements of local laws. provided as under:- 2 ACCOUNTING CONVENTION (i) Companies in liquidation. The Balance Sheet, the Profit and Loss Account, (ii) Foreign Companies having non-moving Revenue Accounts and Cash Flow Statement are balances over a period of three years. drawn up in accordance with the provisions of (iii) Non realizable balances of foreign companies Section 11(1) of the Insurance Act, 1938 and to having moving balances.

ANNUAL REPORT 2015-2016 177 Significant Accounting Policies on Consolidated Financial Statements

4 FOREIGN CURRENCY TRANSACTIONS: 6.2 Retirement Benefits to Employees Revenue transactions in foreign currencies are Liabilities on account of retirement benefits to converted at the daily rate of exchange on the day the employees such as pension, gratuity and accounts are received and transactions are booked. leave encashment are provided for on accrual basis, based on actuarial valuation. 4.1 Non-Monetary items including fixed assets and investments abroad are reported using the 6.3 Apportionment of Expenses exchange rate applicable on the date of 6.3.1 Head office business acquisition. Operating expenses relating to insurance 4.2 Monetary items such as receivables, payables business are apportioned to the Revenue and balances in bank accounts held in foreign Accounts on the basis of Reinsurance Premium currencies are converted using the closing rates accepted during the period for which accounts of exchange at the balance sheet date. are prepared, giving weightage of 75% for 4.3 The exchange gain/loss relating to revenue Marine business & 100 % for Fire, Miscellaneous transaction, due to conversion of foreign & Life Reinsurance business. currencies is accounted for as revenue in 6.3.2 Foreign business respective revenue accounts. The common exchange gain/loss due to conversion is Operating expenses relating to insurance apportioned between Revenue Account and business are also apportioned to the revenue Profit and Loss Account in same proportion as accounts of branches on the same basis as stated in Significant Accounting Policy No. 7. mentioned in 6.3.1 above. 5 RESERVE FOR UNEXPIRED RISK 6.3.3 Investment Expenses The URR provisions are made as under: Expenses relating to investment are apportioned between Revenue and Profit & 5.1 Non-Life Business: Loss Account in the same proportion as stated Reserve for Unexpired Risk in respect of Marine in Significant Accounting Policy No. 7. Insurance and Terrorism Risk Business (included in 7 APPORTIONMENT OF INTEREST, DIVIDENDS AND Fire and Engineering) is made at 100% of Net RENTS Premium, while for all other classes of insurance is made at 50% of Net Premium of the period for which The income from interest, dividends and rent is accounts are prepared. apportioned between Profit and Loss Account and Revenue Accounts in the ratio of Shareholders’ Fund 5.2 Life Business: and Policyholders’ Fund respectively at the Reserve for Unexpired Risk is provided as beginning of the year. The same is further determined by Actuary. apportioned amongst the revenue accounts on the basis of the respective Policyholders’ Fund at the 6 OPERATING EXPENSES RELATING TO INSURANCE beginning of the year. Shareholders’ fund consists BUSINESS (EXPENSES OF MANAGEMENT) of share capital and free reserves. Policyholders’ Fund 6.1 Depreciation consists of provisions for outstanding claims and 6.1.1 Depr eciation is provided on straight line reserves for unexpired risks. method based on useful life of the assets. 8 INVESTMENTS 6.1.2 Depreciation is provided on pro-rata basis on 8.1 Prudential norms as prescribed by appropriate additions to fixed assets and on assets sold/ regulatory authority are followed in regard to: discarded/demolished/destroyed during the (i) Revenue recognition, year.

178 ANNUAL REPORT 2015-2016 Significant Accounting Policies on Consolidated Financial Statements

(ii) Classification of assets into performing and non- 8.8 Debt securities including Government securities performing and and Redeemable Preference shares have been considered as ‘held to maturity’ securities and (iii) Provisioning against performing and non- have been measured at historical cost subject performing assets. to amortization of premium paid over residual 8.2 The cost of investments includes premium on period. The call date has been considered as acquisition and other related expenses. maturity date for amortization of Perpetual 8.3 Short term money market instruments such as Bonds. Collateralized Borrowing and Lending 8.9 In case of repos transaction, difference between Operations (CBLO), Commercial Paper and the selling and buying value is treated as Treasury bill, which are discounted at the time interest income. of contract at the agreed rate are accounted at 8.10 Income received from the Fixed Maturity Mutual their discounted value. fund (Dividend Option) is booked as dividend. 8.4 a) Unrealized gains/losses arising due to 8.11 Investments are apportioned between changes in the fair value of listed equity shares Shareholders’ fund & Policyholders’ fund in the and mutual fund units are taken under the head ratio of balance available in the respective funds “Fair Value Change Account” and on realization at the beginning of the year. reported in Profit and Loss Account. 9 FIXED ASSETS b) Pending realization, the credit balance in the “Fair Value Change Account” is not available for Fixed assets are stated at cost less depreciation. Cost distribution. of shares in Co-operative Societies/Companies for property rights acquired is included under the head 8.5 Final Dividend is accounted for as income in the ‘Buildings’ under Fixed Assets. year of declaration and Interim dividend is accounted as income where the warrants are 10 AMORTIZATION OF PREMIUM AND PROVISION dated 31st March or earlier. FOR DOUBTFUL LOANS, INVESTMENTS AND DEBTS 8.6 Dividends/Interest on shares/debentures under objection/pending deliveries is accounted for Amortization of premium, provision for doubtful on realization/payment. loans, doubtful debts and diminution in the value of investments written off, are recognized in the 8.7 Profit or Loss on sale of investments is profit & loss account. apportioned between Profit and Loss Account and Revenue Accounts in the ratio of 11 COMPLIANCE WITH ACCOUNTING STANDARDS Shareholders’ Fund and Policyholders’ Fund The Corporation has complied with relevant respectively at the beginning of the year. The accounting standards prescribed by ICAI to the same are further apportioned amongst the extent applicable and IRDAI guidelines in revenue accounts on the basis of the respective preparation of its financial statements. Policyholders’ Fund at the beginning of the year. Shareholders’ fund consists of Share Capital and 12 PREMIUM DEFICIENCY: Free Reserves. Policyholders’ fund consists of Premium deficiency is worked out separately for provisions for outstanding claims and reserves each class of business such as fire, marine, for unexpired risks. miscellaneous and life. Premium deficiency is Profit/Loss on sale of investments is computed provided for where the incurred claim is higher than at average book value of investments on the the earned premium for any class of business. date of sale. Premium deficiency is the difference between incurred claim and earned premium.

ANNUAL REPORT 2015-2016 179 Notes Forming Part of Consolidated Financial Statements

NOTES FORMING PART OF CONSOLIDATED ` 443,961 thousand) towards unexpired risk FINANCIAL STATEMENTS AS ON 31ST MARCH, 2016. reserve for life business as determined by Life Appointed Actuary. (Excluding Re-takaful 1 The accounts of the subsidiary company, GIC Re business). India Corporate Member Ltd., London, UK and associates, India International Pte. Ltd., Singapore 3.2 IBNR Provisioning- and GIC Re Bhutan Ltd., Bhutan,which are 3.2.1 AT HO - Certified by Appointed Actuaries of HO and combined in the consolidated financial statements, Branches are prepared on calendar year basis in accordance with the local requirements and these have been 3.2.2 AT GIC Re South Africa Ltd. - As per the class-wise consolidated as such. There are no material IBNR rates provided by the Regulator. changes during the quarter January 2016 to March 3.2.3 At GIC Re India Corporate Member - No IBNR 2016 requiring adjustments to the figures reported required as entire business is retroceded to GIC Re in the audited/unaudited accounts as received. Head Office. 2 Investments 4 Employees Benefits 2.1 Provision of ` 419,704 thousand (Previous Year The Corporation has classified the various benefits ` 377,720 thousand) for assets has been made as provided to employees as under: per Prudential norms for Income recognition, Asset (i) Pension Superannuation Scheme Classification and provisioning and other related methods as prescribed by appropriate regulatory (ii) Defined Benefit Plan authorities. (a) Leave Encashment 2.2 The historical cost of investments valued on Fair (b) Gratuity Value basis is ` 75,661,126 thousand (Previous year ` 70,095,288 thousand). (c) Provident Fund 3 Re-insurance (iii) Settlement Benefit 3.1 During the year, the Corporation has made a During the year Corporation has recognized the provision of ` 599,267thousand (Previous Year following amounts in the Profit And Loss Account: (` ‘000) Particulars Year ending Year ending 31st March,2016 31st March,2015

Pension Superannuation Scheme(Employees’ Pension Fund) 133,788 40,771

Leave Encashment (Earned leave and Sick Leave) 17,842 5,878

Gratuity(Employees Gratuity Fund) 33,473 87,774

Provident Fund(Employees Provident Fund) 22,024 4,885

Settlement Benefit 1,829 1,545

180 ANNUAL REPORT 2015-2016 Notes Forming Part of Consolidated Financial Statements

A) Change in the Present Value of Obligation (` ‘000) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 Present Value 1,303,844 1,159,320 301,229 183,862 227,340 221,462 12,194 10,648 of Obligation as 1 April Interest Cost 96,865 88,920 22,802 14,033 17,778 17,097 954 969 Past Service 0 0 0 0 0 0 0 0 Cost Current 41,209 92,567 22,524 14,410 37,263 31,881 697 576 Service Cost Curtailment 0 0 0 0 0 0 0 0 Cost/(Credit) Settlement 0 0 0 0 0 0 0 0 Cost/(Credit) Benefit Paid* (130,312) (53,168) (19,279) (4,168) 0 0 0 0 Actuarial 103,224 16,205 43,921 93,092 (37,199) (43,100) 178 0 (Gain)/Loss on Obligation Present Value 1,414,830 1,303,844 371,197 301,229 245,183 227,340 14,024 12,195 of Obligation at 31March * EL + SL

ANNUAL REPORT 2015-2016 181 Notes Forming Part of Consolidated Financial Statements

B) Change in the Fair value of Plan Assets (` ‘000) Particulars Pension Gratuity Leave Salary Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 Fair Value of 1,272,735 923,723 225,554 195,961 0 0 0 0 Plan Assets as at 1 April Expected 111,959 95,942 20,319 15,146 0 0 0 0 return on Plan Assets Actuarial Gain/ (44,486) 60,980 35,455 18,615 0 0 0 0 (Loss) on Obligation Contribution 70,924 245,259 75,675 0 0 0 0 0 Benefit Paid (130,312) (53,168) (19,279) (4,168) 0 0 0 0 Fair Value of 1,320,857 1,272,735 337,724 225,554 0 0 0 0 Plan Assets at 31 March Unpaid 0 0 0 0 0 0 0 0 Amount Fair Value of 1,320,857 1,272,735 337,724 225,554 0 0 0 0 Plan (Net) Assets at 31 March Actual return 107,511 156,922 55,774 33,761 0 0 0 0

C) Reconciliation of Present Value of Defined Benefit Obligation and the Fair Value of Assets (` ‘000) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015

Present Value 1,414,830 1,303,844 371,197 301,229 245,182 227,340 14024 12,195 of Obligation Fair Value of 1,320,857 1,272,735 337,724 225,554 0 0 0 0 Plan Assets Unfunded Net (93,973) (31,109) (33,473) (75,675) (245,182) (227,340) (14024) (12,195) Asset/ (Liability) Recognized in Balance Sheet * EL + SL

182 ANNUAL REPORT 2015-2016 Notes Forming Part of Consolidated Financial Statements

D) Expenses recognized in the Profit and Loss Account (` ‘000) For year ending 31st March 2016 Pension Gratuity Leave Salary * Settlement Current Service Cost 41,209 22,524 37,263 697 Interest Cost 96,865 22,802 17,778 954 Curtailment Cost/(Credit) 0000 Settlement Cost/(Credit) 0000 Expected Return on Plan Assets (111,959) (20,319) 0 0 Net actuarial (gains)/losses recognized 107,673 8,466 (37,199) 178 in the period Total Expenses recognized in the 133,788 33,473 17,842 1,829 Profit & Loss A/c *EL + SL (` ‘000) For year ending 31st March 2015 Pension Gratuity Leave Salary * Settlement

Current Service Cost 92,567 14,410 31,881 576

Interest Cost 88,920 14,033 17,097 969

Curtailment Cost/(Credit) 0 0 0 0

Settlement Cost/(Credit) 0 0 0 0

Expected Return on Plan Assets (95,942) (15,146) 0 0

Net actuarial (gains)/losses recognized (44,774) 74,477 (43,100) 0 in the period

Total Expenses recognized in the 40,771 87,774 5,878 1,545 Profit & Loss A/c * EL + SL E) Plan Assets (In %) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 Government Securities {Central & State} 55 50 0 0 0 0 0 0 High quality Corporate Bonds 0 30 0 0 0 0 0 0 Others 45 20 100 100 0 0 0 0 * EL+SL

ANNUAL REPORT 2015-2016 183 Notes Forming Part of Consolidated Financial Statements

F) Actuarial Assumption (In %) Particulars Pension Gratuity Leave Salary * Settlement 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015 Discount Rate 7.82 7.85 7.82 7.72 7.82 7.72 7.82 7.72 Expected 9.00 9.00 8.00 8.00 0.00 0.00 0.00 0.00 return on assets Salary 8.00 10.00 10.00 12.00 10.00 12.00 10.00 12.00 Escalation Attrition/ 2.00 2.00 3.00 3.00 3.00 3.00 3.00 3.00 withdrawal Rate Indian Assured 2006-08 2006-08 2006-08 2006-08 2006-2008 2006-08 1994-96 1994-96 Lives Mortality * EL+SL G) Other Disclosures Pension (` ‘000) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation 103,224 16,205 183,129 42,677 121,258 59,993 On plan assets 44,486 (60,980) 9,392 4,330 45,829 29,683 Present Value of obligation 1,414,830 1,303,844 1,159,320 905,058 844,290 701,951 Fair Value of plan assets 1,320,857 1,272,735 923,723 845,167 740,697 602,006 Excess of obligation over plan assets (93,973) (31,109) 235,597 59,891 103,594 99,945 Gratuity (` ‘000) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation 43,921 93,092 (18,360) (9,536) 20,905 32,456 On plan assets 35,455 18,615 629 7,322 (2,709) (5,504) Present Value of obligation 371,197 301,229 183,862 183,101 177,284 148,538 Fair Value of plan assets 337,724 225,554 195,961 187,826 138,960 101,650 Excess of obligation over plan assets (33,473) (75,675) (12,099) (4,725) 38,324 46,888

184 ANNUAL REPORT 2015-2016 Notes Forming Part of Consolidated Financial Statements

Leave salary (` ‘000) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation (37,199) (43,100) 1,320 (1,268) 65,463 6,199 On plan assets 0 00000 Present Value of obligation 245,182 227,340 221,463 165,615 149,795 81,672 Fair Value of plan assets 0 00000 Excess of obligation over plan assets (245,182) (227,340) 221,463 165,615 149,795 73,112 Settlement (` ‘000) Particulars 2015-16 2014-15 2013-14 2012 - 13 2011 - 12 2010 - 11 Experience Adjustment On obligation 178 0 119 156 322 (522) On plan assets 0 00000 Present Value of obligation 14,024 12,195 10,648 8,800 7,250 6,850 Fair Value of plan assets 0 00000 Excess of obligation over plan assets 14,024 12,195 10,648 8,800 7,250 6,850 Actuarial gain/loss has been charged to Profit and Loss Account. 5 Related party Disclosures as per Accounting Standard - 18 “Related Party Transaction” issued by ICAI: 5.1 Key Management Personnel:

 Smt. Alice Vaidyan, CMD (w.e.f. 23.01.2016)  Shri K Sanath Kumar, Acting CMD (up to 18.02.2016)  Shri A.K. Roy, CMD (up to 31.07.2015)  Smt. Suchita Gupta, Company Secretary  Smt. Alice Vaidyan, CFO (Up to 04.09.2015)  Shri V C Jain, CFO (w.e.f. 04.09.2015)  Shri G C Gaylong, Whole Time Director (w.e.f. 27.01.2016)

ANNUAL REPORT 2015-2016 185 Notes Forming Part of Consolidated Financial Statements

5.2 Details of Key Managerial Personnel Remuneration are as follows: (` ‘000) Sl. Name Designa Gross Corp.’s House Loan Vehicle LTS Other No tion Salary P.F. Perquisite Perquisite Perquisite Perquisite Perquisite 1 Alice Vaidyan CFO 664.95 29.98 0.00 0.00 9.24 0.00 0.00 (01.04.15 to 04.09.15) 2 Alice Vaidyan CMD 1590.34 258.95 0.00 0.00 4.12 0.00 0.00 (23.01.16 to 31.03.16) 3 K.Sanathkumar Acting (31.07.15 to CMD 2211.74 280.43 0.00 0.00 0.00 0.00 0.00 18.02.16) 4 A.K. Roy CMD 720.00 32.00 33.30 0.00 7.20 0.00 183.07 (01.04.15 to 31.07.15) 5 G.C.Gaylong Director 978.77 141.13 19.35 0.00 3.89 0.00 0.00 (27.01.16 to 31.03.16) 6 V.C.Jain CFO 1808.02 248.14 61.29 0.00 12.42 0.00 2.88 ( 04.09.15 to 31.03.16) 7 Suchita Gupta Company (01.04.15 to Secretary 2312.07 308.65 106.67 0.00 21.60 0.00 3.33 31.03.16) Details of Key Managerial Personnel Remuneration (Previous year) Sl. Name Designa Gross Corp.’s House Loan Vehicle LTS Other No tion Salary P.F. Perquisite Perquisite Perquisite Perquisite Perquisite 1 A.K. Roy CMD 2593.73 216 133.2 0.00 21.6 0.00 0.00 2 Alice Vaidyan CFO 1438.94 190.75 0.00 0.00 21.6 0.00 5.00 3 Suchita Gupta Company 1185.90 60.22 83.41 0.00 21.6 428.48 0.00 Secretary 6 Earnings per Share (EPS) as per Accounting Standards 20 issued by ICAI: 2015-16 2014-15

Profit after Tax (` 000) 30,168,867 27,822,484

Number of equity shares (` 000) 4,300,000 4,300,000

Nominal value of share 1.00 1.00

Basic and Diluted EPS (in `) 7.02 6.47

186 ANNUAL REPORT 2015-2016 Notes Forming Part of Consolidated Financial Statements

7 Disclosures as per Accounting Standard – 22 “Accounting for Taxes on Income”: 7.1 Deferred Tax assets are recognized only if there is a virtual certainty backed by convincing evidence that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The breakup of Net Deferred Tax Assets is as under: (` ‘000) As on 31.03.2016 As on 31.03.2015 Particulars Deferred Tax Deferred Tax Asset Liability Asset Liability

Timing difference on account of difference in book - 109,544 49,037 - depreciation & depreciation under Income Tax Act, 1961.

Provision for employees benefits 133,812 - 125,668 -

Others 27,174 379 31,080 116

Foreign Branches -- --

TOTAL 160,986 109,923 205,785 116

Net Deferred Tax 51,063 205,669 - 8 Contingent Liabilities: 8.1 Partly paid up investments ` Nil (Previous year NIL) 8.2 Underwriting commitments outstanding ` NIL (Previous year NIL) 8.3 Claims, other than under policies not acknowledged as debts: ` 11,000 thousand (Previous year ` 11,000 thousand) 8.4 Guarantees/LC given by or on behalf of the Corporation ` 10,607,018 thousand (Previous year ` 8,352,709 thousand). 8.5 Statutory demand/liabilities in dispute - Income-tax demands disputed, not provided for ` 1 7,027,139 thousand (Previous year ` 22,496,974 thousand). 8.6 Reinsurance obligations to the extent not provided for in the accounts NIL (Previous year NIL) in view of Significant Accounting Policy No. 3.1. 8.7 Pending legal/arbitration cases are very old. These cases are primarily against the erstwhile subsidiary companies and the Corporation has been impleaded as a proforma respondent because of its erstwhile status of the holding company. No financial impact of such cases is envisaged.

ANNUAL REPORT 2015-2016 187 Notes Forming Part of Consolidated Financial Statements

9 Segment Reporting: Segment reporting as per Accounting Standard - 17 “Segment Reporting of ICAI, has been compiled with as required by IRDAI (Preparation of Financial Statements and Auditors Report of Insurance companies) Regulation, 2002 (` ‘000) Class of Earned Incurred Net Expenses of Premium Underwriting Business Premium Claims Commission Management Deficiency Profit/Loss(-) 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015 Fire 46235 952 39840 269 35070 446 26635 633 12555 948 9745 045 681 359 574 877 (2071 801) 2884 714 Motor 41468 780 36490 659 38991 678 38874 414 8218 799 6499 826 417 342 378 659 (6159 040) (9262 240) Aviation 4705 623 4722 193 3303 996 4087 873 707 155 877 009 48 750 75 807 645 721 (318 497) Engineering 7349 906 7385 380 2342 707 4506 529 2029 282 1967 726 84 808 82 553 2893 109 828 572 W.C. 218 093 212 787 138 720 77 434 37 785 27 023 2 508 1 864 39 080 106 466 Liability 1226 048 956 081 583 562 (57 487) 206 293 188 168 14 348 11 987 421 845 813 413 PA 3224 051 3238 707 1570 915 2068 944 1350 926 559 704 34 750 26 013 267 460 584 045 Health 23051 867 18665 986 21271 974 21291 183 5150 064 3699 443 253 552 231 525 (3623 722) (6556 165) Other Misc. 12284 368 11675 171 16084 554 8720 281 2617 405 2095 119 156 816 139 502 (6574 407) 720 270 FL/Credit 1385 256 2000 432 2220 066 1988 749 304 740 255 207 16 532 14 768 (1156 082) (258 293) Marine Cargo 3525 316 3780 116 2156 858 3557 035 706 191 907 145 25 037 33 097 637 230 (717 161) Marine Hull 5917 981 5576 656 4173 360 6376 640 1104 942 1088 485 49 538 56 671 (584 596) 584 596 1174 737 (2529 736) Life 2411 272 1394 511 1750 283 986 033 74 359 78 376 21 633 23 453 564 996 306 649 TOTAL 153004 513 135938 946 129659 120 119113 260 35063 890 27988 276 1806 974 1650 778 (584 596) 584 596 (12940 875) (13397 963)

188 ANNUAL REPORT 2015-2016 Notes Forming Part of Consolidated Financial Statements

10 Financial Information pursuant to schedule III of Companies Act,2013 Net Worth Share in Profit/(Loss)

Name of the Entities Percentage Amount Percentage Amount of Net Assets (in ` ‘000) of Profit/ (in ` ‘000) (Loss) Parent Company General Insurance Corporation of 96.98 392,825,538 95.87 28,483,893 India (GIC Re) Subsidiaries Companies (Foreign) a. GIC Re South Africa Ltd., Johannesburg 0.09 358,918 (0.11) (31,929) b. GIC Re India Corporate Member Ltd., 0.00 7,494 0.01 3,963 London , UK Associates Foreign (investment as per Equity method) a. India International Pte. Ltd., Singapore 0.82 3,321,418 0.87 260,114 b. GIC Re Bhutan Ltd., Bhutan 0.00 -3,569 0.01 3,930 Associates Indian (investment as per Equity method) a. Agriculture Insurance Company 2.11 8,552,226 3.33 990,028 of India Ltd. New Delhi Total 100.00 405,062,025 100.00 29,709,999 Adjustments arising out of consolidation 28,190 458,868 Share of Minority in Subsidiaries 0 0 0 0 Consolidated Net Assets/Net Profit 405,090,215 30,168,867 11 The Corporation has prepared Cash flow statement adopting the indirect method. 12 Prior period items have not been separately disclosed, as the amount is not material. 13 Figures relating to the previous year have been regrouped/rearranged, wherever necessary.

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 189 Consolidated Cash Flow Statement

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2016 AS PER INDIRECT METHOD (` ‘000) Particulars 31st March 2016 31st March 2015

A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxation as per Profit & Loss A/c 29877 803 2 82 93 096 Adjustments for: Exchange -Loss/Gain charged (2353 986) 8 59 451 Provision for diminution in value of investment 1359 916 5 88 077 Provision for doubtful loans, investments & Debts (1153 207) 11 07 131 Amortisation of Premium on Investment 185 605 1 81 025 Depreciation 98 110 94 371 -Profit/Loss on sale of Assets 223 (1 858) Provision for Leave Encashment & Salary Arrears (106 467) ( 56 525) Sundry Balances Written off/-back 0 (1969 806) 11 142 27 82 813 Operating Profit before working capital changes 27907 997 3 10 75 909 Changes in Unexpired Risk Reserves 11556 330 30 12 365 Changes in Premium Deficiency Reserve (584 596) 5 84 596 Changes in Provisions for Outstanding Claims 14728 606 (32 04 435) Changes in Income accrued on Investments (717 106) (8 57 789) Changes in Balances with Insurance Companies 3035 232 (16 02 548) Changes in Advance and Deposits (8976 788) (1 28 34 485) Changes in other Current Liabilities 7763 279 26804 957 72 07 509 (76 94 788) Cash generated from operations 54712 954 2 33 81 121 Income Tax Paid (Net) 4046 844 22 24 105 Net Cash from Operating Activities 58759 798 2 56 05 226 B) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets (425 927) (3 36 443) Proceeds from sale of Fixed Assets 1 616 4 687 Foreign Currency Translation Reserve 2190 849 (13 22 145) Changes in net Investments (47108 468) (2 44 60 037) Net Cash used in Investing Activities (45341 930) (2 61 13 938)

190 ANNUAL REPORT 2015-2016 Consolidated Cash Flow Statement

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2016 AS PER INDIRECT METHOD

(` ‘000) Particulars 31st March 2016 31st March 2015

C) CASH FLOWS FROM FINANCING ACTIVITIES Dividend Paid 5632 354 (33 11 000) Dividend Tax Paid (1099 332) (5 62 704) Net Cash from Financing Activities 4533 022 (38 73 704) D) Effect of Foreign Exchange on Cash & Cash equivalents (Net) 2353 986 (8 47 758) Net increase in Cash and Cash equivalents (A+B+C+D) 20304 876 (52 30 174) Cash and Cash equivalents at beginning of period 77488 758 8 27 18 932 Cash and Cash equivalents at the end of period 97793 634 7 74 88 758

As per our report of even date Alice G Vaidyan For GBCA & ASSOCIATES For SAMRIA & CO Chairman-cum-Managing Director Chartered Accountants Chartered Accountants Usha Sangwan Dr A K Saxena Firm Regn No. 103142W Firm Regn No. 109043W Director Director YOGESH R. AMAL ADHAR SAMRIA G C Gaylong D R Waghela Partner Partner Director & GM GM Finance Membership No.: 111636 Membership No.: 049174 V C Jain Suchita Gupta CFO Company Secretary Mumbai Dated: 29.06.2016

ANNUAL REPORT 2015-2016 191 Notes

192 ANNUAL REPORT 2015-2016 GIC RE SOUTH AFRICA LTD

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

The financial statements have been audited in compliance with Section 30 of the South African Companies Act 71 of 2008.

Prepared under the supervision of: D. Prasad Managing Director and Chief Excecutive Officer

ANNUAL REPORT 2015-2016 193 194 ANNUAL REPORT 2015-2016 Director's Responsibility Statement

DIRECTORS’ RESPONSIBILITY STATEMENT

The directors are responsible for the preparation and fair presentation of the annual financial statements of GIC Re South Africa Ltd, comprising the statement of financial position as at 31 March 2016, and the statements of comprehensive income, changes in equity and cash flows for the period then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. In addition the directors are responsible for preparing the Directors’ report.

The directors are also responsible for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management.

The directors have made an assessment of the ability of the company to continue as a going concern and have no reason to believe the business will not be a going concern in the year ahead.

The auditor is responsible for reporting on whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Approval of the annual financial statements

The annual financial statements of GIC Re South Africa Ltd, as identified in the first paragraph, were approved by the board of directors on 24 June 2016 and are signed on their behalf by

D Prasad A G Vaidyan Authorised Managing Director Chairman

Declaration of the Company Secretary

In terms of S88 (2)(e) of the Companies Act 71 of 2008, I certify that in respect of the financial period ended 31 March 2016, the company has lodged with the Registrar of Companies all such returns that are required by the Companies Act, and that all such returns are to the best of my knowledge and belief, true, correct and up to date.

I Blaikie Company Secretary

ANNUAL REPORT 2015-2016 195 Audit Committee Report

AUDIT COMMITTEE REPORT Guests A G Vaidyan In addition to having specific statutory responsibilities, (Chairman of the the audit committee is a sub-committee of the board of Board, Non-executive) - - Yes directors. It assists the board through advising and YR Sunkara making recommendations on financial reporting, (Managing Director oversight of financial risk management and internal & Chief Executive financial controls, external audit functions and statutory Officer) Yes Yes Yes and regulatory compliance of the company. General risk D Prasad management remains the responsibility of the board. (Managing Director & Chief Executive Terms of reference Officer Designate) - - Yes A Malherbe The audit committee has adopted the formal terms of (External Auditor) Yes No No reference that have been approved by the board of A Vos directors, and has executed its duties during the past (External Auditor) Yes No No financial year in accordance with these terms of C Falconer reference. (Life Actuary) Yes No No The composition of the audit committee Statutory duties

Name Appointed Resigned Qualifications Position Independent

S Bhikha 24-Apr-14 B Compt Hons Chairman Yes CA(SA)

N Mohan 24-Apr-14 31-May-15 FCII, B Com, Member No ICSI India

J Bagg 24-Apr-14 B.Sc. FASSA, Member Yes FIA, ASA

B Balachandra 13-Jul-15 4-Feb-16 B.Sc., AIII Member No

The executive directors and external auditor attend the Statutory duties committee meetings by invitation only. The external auditor has unrestricted access to the audit committee. In the execution of its statutory duties, as required in terms of the Companies Act, during the past financial year the audit committee has: Meetings  Ensured the re-appointment as external auditor of The audit committee held three meetings during the the company of a registered auditor who, in the year. Attendance at the meetings is shown below: opinion of the audit committee, is independent of the company. 13-Jul- 9-Sep- 13-Feb- 15 15 16  Determined the fees to be paid to the external Members auditor and such auditor’s terms of engagement. S Bhikha Yes Yes Yes J Bagg Yes Yes Yes  Ensured that the appointment of the external B Balachandra Yes Yes - auditor complies with this Act and any other legislation relating to the appointment of such auditor.

196 ANNUAL REPORT 2015-2016 Audit Committee Report

 Considered the independence of the external Legal requirements auditor and has concluded that the external auditor has been independent of the company throughout The audit committee has complied with all applicable the year taking into account all other non-audit legal, regulatory and other responsibilities for the year services performed and circumstances known to under review. the committee. Annual financial statements  Confirmed that there were no complaints relating Following our review of the annual financial statements to the accounting practices of the company, the of GIC Re South Africa Ltd for the year ended 31 March content or auditing of its financial statements, the 2016, we are of the opinion that, in all material respects, internal financial controls of the company, or to any they comply with the relevant provisions of the related matter. Companies Act and International Financial Reporting  Based on reports from the external auditor, and Standards, and that they fairly present the financial appropriate inquiries, made submissions to the position at 31 March 2016 and the results of operations board on any matter concerning the company’s and cash flows for the year then ended. accounting policies, financial control, records and reporting, including input to the board’s statement regarding control effectiveness.

S Bhikha

Chairman of the audit committee

24 June 2016

ANNUAL REPORT 2015-2016 197 Independent Auditor’s Report

INDEPENDENT AUDITOR’S REPORT We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our To the shareholder of GIC Re South Africa Ltd opinion.

Report on the financial statements Opinion

We have audited the financial statements of GIC Re South In our opinion, these financial statements present fairly, Africa Ltd, which comprise the statement of financial in all material respects, the financial position of GIC Re position at 31 March 2016, and the statements of South Africa Ltd at 31 March 2016, and its financial comprehensive income, changes in equity and cash performance and cash flows for the year then ended in flows for the year then ended, and the notes to the accordance with International Financial Reporting financial statements which include a summary of Standards and the requirements of the Companies Act significant accounting policies and other explanatory of South Africa. notes, as set out on pages 205 to 238. Other reports required by the Companies Act Directors’ responsibility for the financial statements As part of our audit of the financial statements for the year ended 31 March 2016, we have read the Directors’ The company’s directors are responsible for the Report, the Audit Committee’s Report and the Company preparation and fair presentation of these financial Secretary’s Certificate for the purpose of identifying statements in accordance with International Financial whether there are material inconsistencies between Reporting Standards and the requirements of the these reports and the audited financial statements. These Companies Act of South Africa, and for such internal reports are the responsibility of the respective preparers. control as the directors determine is necessary to enable Based on reading these reports we have not identified the preparation of financial statements that are free from inconsistencies between these reports and the audited material misstatement, whether due to fraud or error. financial statements. However, we have not audited these reports and accordingly do not express an opinion on Auditor’s responsibility these reports.

Our responsibility is to express an opinion on these Report on other legal and regulatory requirements financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with In terms of the IRBA rule published in Government ethical requirements and plan and perform the audit to Gazette 39475 dated 4 December 2015, we report that obtain reasonable assurance about whether the financial KPMG Inc. has been the auditor of GIC Re South Africa statements are free from material misstatement. Ltd for 2 years.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the KPMG Inc. financial statements. The procedures selected depend Registered Auditor on the auditor’s judgement, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making Per Antoinette Malherbe those risk assessments, the auditor considers internal Chartered Accountant (SA) control relevant to the entity’s preparation and fair Registered Auditor presentation of the financial statements in order to Director design audit procedures that are appropriate in the Friday, June 24, 2016 circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the Private Bag 9 KPMG Crescent reasonableness of accounting estimates made by Parkview 85 Empire Road management, as well as evaluating the overall 2122 Parktown presentation of the financial statements. 2193

198 ANNUAL REPORT 2015-2016 Statutory Actuary’s Report

GIC RE SOUTH AFRICA LTD STATUTORY ACTUARY’S REPORT (LIFE BUSINESS) AS AT 31 MARCH 2016 STATEMENT OF ASSETS, LIABILITIES, EXCESS ASSETS AND CAPITAL REQUIREMENTS Year ended 15 months ended Particulars 31 March 2016 31 March 2015 R ‘000 R ‘000

Published Reporting Basis

Total value of life assets as per statement of financial position 42,607 39,565

Actuarial value of policy liabilities 17,898 15,091 Current and other liabilities as per the life statement of financial position 5,868 2,606

Total value of liabilities 23,766 17,697

Excess Assets 18,841 21,868

Statutory Basis

Total value of assets as per life statement of financial position 42,607 39,565 Disallowed assets (684) (546)

Value of assets on the Statutory Basis 41,923 39,019

Actuarial value of life policy liabilities 17,898 15,091 Current and other liabilities as per life statement of financial position 5,868 2,606

Total value of liabilities 23,766 17,697

Excess Assets 18,157 21,321

Capital Adequacy Requirements 10,000 10,000

CAR Cover 182% 213%

Analysis of change in Excess Assets on Published Reporting Basis

The excess of the value of assets over the value of liabilities has changed as follows over the reporting period:

Excess Assets at end of reporting period 18,841 21,868 Excess Assets as at beginning of reporting period 21,868 18,587

Change in Excess Assets over the reporting period (3,027) 3,281

ANNUAL REPORT 2015-2016 199 Statutory Actuary’s Report

GIC RE SOUTH AFRICA LTD STATUTORY ACTUARY’S REPORT (LIFE BUSINESS) AS AT 31 MARCH 2016 STATEMENT OF ASSETS, LIABILITIES, EXCESS ASSETS AND CAPITAL REQUIREMENTS Year ended 15 months ended Particulars 31 March 2016 31 March 2015 R ‘000 R ‘000

The change in the excess assets is due to the following factors:

Investment return generated by excess assets over liabilities:

Investment income 1,083 980

Capital appreciation 332 260

Total investment return on excess assets 1,415 1,240

Operating profit/(loss) (2,161) 728

Changes in valuation methods or assumptions (2,280) 1,313

Reported profit in annual financial statements (3,026) 3,281

Total change in Excess Assets (3,026) 3,281

Reconciliation of Excess Assets between Published Reporting Basis and Statutory Basis

Excess Assets on Published Reporting Basis 18,841 21,868

Less: Asset Adjustments in terms of Schedule 3 of the Act (684) (546)

Excess Assets on Statutory Basis 18,157 21,322

200 ANNUAL REPORT 2015-2016 Statutory Actuary’s Report

GIC RE SOUTH AFRICA LTD STATUTORY ACTUARY’S REPORT (LIFE BUSINESS) AS AT 31 MARCH 2016 NOTES TO THE STATEMENT OF ASSETS, LIABILITIES, EXCESS ASSETS AND CAPITAL REQUIREMENTS

Changes in Published Reporting Valuation Methods  Discretionary margins to ensure the release of profits or Assumptions consistent with policy design and to allow for any additional uncertainty. The value of net liabilities as at 31 March 2016 increased by R2.280 million as a result of changes to the valuation The effect of the discretionary margins amounts to assumptions. R0.451 million. This is the result of the elimination of negative reserves on certain classes of business as well The main assumption changes were as follows as the inclusion of a 7.5% margin on the UPR. (excluding compulsory margins): The reserves for term, PHI and Waiver of Premium classes - The expense inflation assumption for business were established by discounting the future expected net valued on a discounted cashflow basis was increased claims and net expense and commission outgo, less the from 5.69% p.a. to 6.97% p.a. due to changes in the future net office premiums (if any) on a policy-by-policy inflation curve; basis. The main assumptions (inclusive of compulsory margins as outlined in SAP104) were: - The interest rate assumption for business valued on a discounted cashflow basis was increased from For the Term Business : 7.25% p.a. to 8.75 % p.a. Investment return : 8.50% p.a. Renewal expenses : 30% of net premiums - The assumed operating ratio increased due to poor Mortality : 134.4% of SA85/90 plus claims experience resulting in the need for a 5.4% Doyle Pattern II deficiency/contingency reserve. Lapse rate : 7.5% in all years Commission : 24% of net premiums Published Reporting Valuation Methods and Assumptions For the WOP and PHI Business: Investment return : 8.50% p.a. The valuation was performed using the Statutory Renewal expenses : R275 per policy p.a. Valuation Method for insurance contracts. Assets and Expense inflation : 7.66% p.a. policy liabilities have been valued on methods and Mortality : 138.7% of SA85/90 assumptions that are consistent with each other. Inception Rate : 105% of CMIR12 The result of the valuation methods and assumptions is (deferred 14 weeks) that profits are released appropriately over the term of Benefit Escalation : 6% active; 9% claimants each policy, to avoid premature recognition of profits Premium Escalation : Benefit escalation + 1% that may give rise to losses in later years. For risk premium business an Unexpired Risk Reserve Published Reporting Liability Valuation Methods was established by multiplying the assumed operating and Assumptions ratio by the Unearned Premium Reserve (UPR).

In the calculation of liabilities, provision has been made An Incurred But Not Reported (IBNR) reserve of 1.59 for: months claims was established for risk premium business while an IBNR of 8 months premium was established for  The best-estimate of the future experience, plus PHI business.

 The compulsory margins prescribed by SAP104, plus

ANNUAL REPORT 2015-2016 201 Statutory Actuary’s Report

The Profit Commission reserve is the sum of all Certificate of Financial Position outstanding payments to be made to cedants plus interest owing on these amounts. I hereby certify that:

Where credible experience data existed, the parameters  The valuation on the Statutory Basis of GIC Re South were based on experience investigations undertaken Africa Ltd as at 31 March 2016, the results of which during the financial year. are summarised above, has been conducted in accordance with, and this Statutory Actuary’s Report Policyholder reasonable benefit expectations have been has been produced in accordance with, applicable allowed for. All contractual obligations have been taken Actuarial Society of South Africa’s Advisory Practice into account. All business is written on a non-profit basis. Notes and Standard of Actuarial Practice;

Published Reporting Asset Valuation Methods and  In terms of Section 31(c) of the Long-Term Act of Assumptions 1998, some of the Company’s assets exceed the maximum allowable level. However, after adjusting All assets (including the excess of assets over liabilities) the assets for the asset spreading restrictions, the have been valued as described in the notes to the Company is still in a financially sound position. company accounts.  The Company was financially sound on the Statutory Statutory Capital Adequacy Requirements basis as at the valuation date, and in my opinion is likely to remain financially sound for the foreseeable The Statutory Capital Adequacy Requirement (CAR) is future. the additional amount required, over and above the actuarial liabilities, to enable the company to meet material deviations in the main parameters affecting the life assurer’s business.

The Statutory CAR was calculated in accordance with PC Falconer SAP104 issued by the Actuarial Society of South Africa. Statutory Actuary 23-Jun-16 For the purpose of grossing up the Immediate Ordinary Capital Adequacy Requirements (IOCAR) to determine the Ordinary Capital Adequacy Requirements (OCAR), it has been assumed that assets backing the CAR are invested in cash.

The OCAR exceeded the Terminal Capital Adequacy Requirements (TCAR), and thus the CAR has been based on the OCAR.

In terms of the Board Notice of 2010, a minimum Capital Adequacy Requirement (MCAR) applies. The MCAR for the Company is R10 million which exceeds the OCAR described above, and thus the CAR has been based on the MCAR.

202 ANNUAL REPORT 2015-2016 Directors’ Report

GIC RE SOUTH AFRICA LTD The International Monetary Fund (IMF) noted that sub- DIRECTORS’ REPORT Saharan Africa’s growth has also started to weaken after FOR THE YEAR ENDED 31 MARCH 2016 over a decade of solid numbers. Declining global commodity prices have already had significant negative The directors have pleasure in presenting their report impacts on economies such as Nigeria, Angola and for the year ended 31 March 2016. Namibia. Nevertheless, the IMF is still predicting a combined growth rate of around 4.5% for sub-Saharan Business Africa in 2016.

GIC Re South Africa Ltd is a 100% owned subsidiary of The South African economy continued its decline in 2015 General Insurance Corporation of India (GIC Re), which as a result of factors ranging from rising interest rates, is fully owned by the Government of India. GIC Re severe drought in most parts of the country that started acquired saXum Reinsurance Limited, a composite impacting food prices, subdued growth in equity (Life and Non-Life) reinsurer in April 2014. The Company markets and continuing pressure on disposable name was changed from saXum Reinsurance Limited to household incomes. Furthermore, the deterioration of GIC Re South Africa Ltd after the approval from the the Rand, particularly in December 2015; continuing Financial Services Board and the Companies and energy constraints and costs, and the possibility of Intellectual Property Commission. further downgrades to the country’s sovereign ratings are negatively impacting investor confidence in South GIC Re South Africa Ltd holds a composite licence, but Africa. to date only short-term reinsurance has been activated. Life Reinsurance is expected to be activated in 2017. Share capital GIC Re South Africa Ltd’s vision is to become a truly The company issued no shares during the year (2015: 55 African Reinsurer. The core business philosophy includes 750 000 ordinary shares of no par value totalling R111.5 reinsurance capacity development in Sub-Saharan Africa, million). application of state of the art technology, mutually beneficial relationships, benchmarking reinsurance and Overview for the year service delivery mechanisms and professional attitude. The results for the year and the financial position of the The company was rated BB+ (Global) and zaA+ (National) company are fully disclosed in the attached financial with a stable outlook by S&P ratings in July 2015. statements.

GIC Re South Africa Ltd’s operation in Johannesburg Holding company commenced underwriting business on 1 January 2015. For the year ended 31 March 2016, the company The company is a wholly owned subsidiary of General recorded a growth of 113%* in GWP as accounted. Insurance Corporation of India (GIC Re).

South Africa Economic Outlook: Dividends

Global economic growth prospects continued to No dividends were paid or declared during the year experience significant challenges. China’s slowing (2015 : the subsidiaries were declared as a dividend in growth, declining global commodity prices and the specie at their carrying value, on the dividend declaration strengthening of the US dollar against emerging market date of 24 April 2014 for R42 021 633). currencies are threatening the growth prospects of economies like South Africa.

*This growth is because of Non-life business only being operational for 3 months in the last financial year.

ANNUAL REPORT 2015-2016 203 Directors’ Report

Change in the Financial Year The directors in office Date Date at the date of this Appointed Resigned The company changed its financial year end from 31 report are : December to 31 March during 2015. The change in the C Moosa year end was to align the year end of the company with (Independent, that of its parent. non-executive) 24-Apr-14 Directors J Bagg (Lead Independent, The directors in office Date Date non-executive) 24-Apr-14 at the date of this Appointed Resigned report are : Directors’ interest A G Vaidyan 23-Jan-16 No directors have an interest in the company. (Chairman, non-executive) B N Narasimhan Secretary and registered office (non-executive) 4-Feb-16 I Blaikie is the company secretary. The registered office D Prasad and office of the secretary are: (Managing Executive) 22-Feb-16 AK Roy 15 Eton Road (Chairman, non-executive) 24-Apr-14 31-Jul-15 Parktown 2193 N Mohan (non-executive) 24-Apr-14 31-May-15 Auditor YR Sunkara KPMG Inc. (Managing Executive) 24-Apr-14 19-Feb-16 S Kumar Company registration number (Chairman, non-executive) 31-Jul-15 22-Jan-16 1956/003037/06 B Balachandra (non-executive) 13-Jul-15 4-Feb-16 Number of employees S Bhikha The number of people employed by the company at (Independent, 31 March 2016 is 14 (2015: 11). non-executive) 24-Apr-14

204 ANNUAL REPORT 2015-2016 Statement Of Financial Position

GIC RE SOUTH AFRICA LTD STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2016

Year ended 15 months ended Particulars Note 31 March 2016 31 March 2015 RR

ASSETS

Equipment 5 1,524,957 1,585,004 Technical assets under insurance contracts 417,919,918 124,653,562 Retroceded outstanding claims 6 202,901,429 26,207,193 Retroceded policyholder liabilities 7 5,832,763 5,265,076 Retroceded unearned premium reserve 8 165,324,413 78,852,140 Gross deferred acquisition costs 9 43,861,313 14,329,153 Investments 10 292,403,805 73,724,899 Deferred taxation 11 5,971,195 5,971,195 Amounts due from companies on reinsurance contracts 200,469,156 112,092,397 Other accounts receivable 302,174 2,023,041 Cash at bank and on hand 37,541,978 33,283,828

Total assets 956,133,183 353,333,926

LIABILITIES AND SHAREHOLDER’S EQUITY

Technical liabilities under insurance contracts 491,441,445 167,626,647 Gross outstanding claims 6 237,563,814 42,817,278 Gross policyholder liabilities under life insurance contracts 7 23,730,776 20,356,542 Gross unearned premium reserve 8 183,409,426 87,613,488 Retroceded deferred acquisition cost 9 46,737,429 16,839,339 Deposits withheld from retrocessionaires 375,711,021 80,392,245 Amounts due to companies on reinsurance contracts 8,461,983 17,674,446 Other accounts payable 12 534,431 1,000,126

Total liabilities 876,148,880 266,693,464

SHAREHOLDER’S EQUITY

Share capital 13 111,500,000 111,500,000 Revaluation reserve 14 1,664,865 1,392,622 Retained earnings (33,180,562) (26,252,160)

Total shareholder’s equity 79,984,303 86,640,462

Total liabilities and shareholder’s equity 956,133,183 353,333,926

ANNUAL REPORT 2015-2016 205 Statement Of Comprehensive Income

GIC RE SOUTH AFRICA LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2016

Year ended 15 months ended Particulars Note 31 March 2016 31 March 2015 RR Gross premiums written 331,818,342 155,877,705 Retroceded premiums (291,781,769) (129,976,349) Net premiums written 40,036,573 25,901,356

Change in provision for unearned premiums 8 (9,323,665) (8,761,348) Gross (95,795,938) (87,613,488) Reinsured 86,472,273 78,852,140

Net premium earned 30,712,908 17,140,008

Commission income 17 61,933,115 11,848,833 Net investment income 15 8,087,125 4,739,502 (Increase)/decrease in net life policyholder liabilities 7 (2,806,547) 3,987,851

Net income 97,926,601 37,716,194

Claims incurred, net of reinsurance 16 (32,603,728) (12,715,911) Commission expense 17 (57,982,690) (10,788,390) Interest paid (80,882) (142,343) Investment management expenses (917,816) (374,443) Management expenses (18,583,626) (10,204,020) Increase in provision for doubtful debts (1,090,621) - Foreign exchange gain/(loss) 6,676,603 (194,239)

(Loss)/profit before taxation 18 (6,656,159) 3,296,848

Taxation 19 - -

(Loss)/profit for the year (6,656,159) 3,296,848

Other comprehensive income for the year, net of taxation - -

Total comprehensive (loss)/profit for the year (6,656,159) 3,296,848

206 ANNUAL REPORT 2015-2016 Statement Of Changes In Equity

GIC RE SOUTH AFRICA LTD STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2016

Share Revaluation Retained Total Particulars capital reserve earnings RRRR 31 March 2016

Balance as at 1 April 2015 111,500,000 1,392,622 (26,252,160) 86,640,462

Share issue - - - -

Non-life - - - -

Total comprehensive profit for the period - - (6,656,159) (6,656,159)

Non-life - - (3,630,115) (3,630,115) Life - - (3,026,044) (3,026,044)

Transfer to reserves Revaluation of investments - 272,243 (272,243) -

Balance as at 31 March 2016 111,500,000 1,664,865 (33,180,562) 79,984,303

31 March 2015

Balance as at 1 January 2014 11,500,000 (9,103,613) 22,968,860 25,365,247

Share issue 100,000,000 - - 100,000,000

Non-life 100,000,000 - - 100,000,000

Total comprehensive profit for the year - - 3,296,848 3,296,848

Non-life - - 17,624 17,624 Life - - 3,279,224 3,279,224

Dividend in specie (42,021,633) (42,021,633)

Non-life - - (42,021,633) (42,021,633)

Transfer from reserves Revaluation of investments - 10,496,235 (10,496,235) -

Balance as at 31 March 2015 111,500,000 1,392,622 (26,252,160) 86,640,462

ANNUAL REPORT 2015-2016 207 Statement Of Cash Flows

GIC RE SOUTH AFRICA LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2016

Year ended 15 months ended Particulars Note 31 March 2016 31 March 2015 RR

Cash flows from operating activities

Cash generated/(utilised) by operations 25.1 215,355,019 (21,246,110) Interest received 7,717,401 6,487,627 Interest paid (80,882) (142,343) Dividends received 60,649 74,518

Net cash inflow/(outflow) from operating activities 223,052,187 (14,826,308)

Cash flows from investing activities

Net acquisition of investments (218,369,831) (65,765,772) Additions to property and equipment (424,206) (1,805,721) Proceeds on disposal of equipment - 592,159

Net cash outflow from investing activities (218,794,037) (66,979,334)

Net increase/(decrease) in cash and cash equivalents 4,258,150 (81,805,642)

Cash flows from financing activities

Shares issued - 100,000,000

Cash and cash equivalents

At the beginning of year 33,283,828 15,089,470

At the end of year 25.2 37,541,978 33,283,828

208 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

GIC RE SOUTH AFRICA LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

1 Accounting policies estimates and assumptions relate to technical provisions and liabilities under insurance contracts 1.1 Statement of compliance detailed in note 4. In addition, assumptions are made about the recoverability of insurance The financial statements of the company are receivables and credit control is strictly monitored. prepared on the going concern basis and in accordance with International Financial Reporting 1.3 Classification of contracts Standards (IFRS) and the requirements of the Companies Act of South Africa. The accounting Contracts under which the company accepts policies set out below have been applied significant insurance risk from another party (the consistently to all years presented in the financial policyholder) through reinsurance inwards by statements. agreeing to compensate the policyholder or other beneficiary if a specific uncertain future event (the 1.2 Basis of preparation insured event) adversely affects the policyholder or other beneficiary are classified as insurance The company is domiciled in South Africa and its contracts. The same definition is applied to reporting currency is Rand. The company changed reinsurance outwards. Insurance risk is risk other its financial year end from 31 December to 31 than financial risk. Financial risk is the risk of a March last year to align with the year end of its possible future change in one or more of a specific parent company. The amounts presented as interest rate, security price, commodity price, comparitive figures are the fifteen months to 31 foreign exchange rate, index of prices or rates, a March 2015. credit rating or credit index or other variable, provided in the case of a non-financial variable that Basis of measurement the variable is not specific to a party to the contract. The financial statements are prepared on the Contracts that do not meet the above definition historical cost basis, adjusted by the revaluation of are classified as investment contracts and are investments to fair value. deposit accounted. Use of estimates 1.4 Equipment The preparation of financial statements in Equipment, furniture and motor vehicles are stated conformity with International Financial Reporting at cost less accumulated depreciation which is Standards requires management to make calculated to write off the cost of the assets to its judgements, estimates and assumptions that affect residual value over their useful lives in a pattern the application of policies and reported amounts that reflects their economic benefits. of assets, liabilities, income and expenses. The estimates and associated assumptions are based The current estimated useful lives are as follows: on historical experience and various other factors that are believed to be reasonable under the  Equipment circumstances, the results of which form the basis Office Equipment 6 years of making judgements about carrying values of Computer equipment 3 years assets and liabilities that are not readily apparent Furniture and fittings 6 years from other sources. Actual results may differ from  these estimates. The most significant judgements,  Motor vehicles 5 years

ANNUAL REPORT 2015-2016 209 Notes To The Financial Statements

The useful lives and depreciation methods are profits or losses and is shown separately on the reassessed annually. The residual values, if not statement of financial position. insignificant, are also reassessed annually. Where the carrying amount of an asset is greater than its The revaluation reserve comprises of the estimated recoverable amount, it is written down revaluation of investments above or below their immediately to its recoverable amount. original cost, after deferred tax is recognised on the revaluation. A gain or loss arising from a change in Gains and losses on disposals are determined by fair value is recognised in net profit or loss for the comparing the proceeds with the carrying amount period in which it arises and thereafter is of the assets and are included in profit or loss. transferred to a revaluation reserve. When investments are disposed of, the cumulative gain 1.5 Outstanding and unintimated claims or loss previously recognised in the revaluation reserve is transferred to retained income. Provisions are made for claims incurred up to the reporting date. The provisions exclude Value Added 1.9 Premiums Tax but include an estimate for future claims handling costs. Premium income on insurance contracts is brought to account at the earlier of the date of notification 1.6 Policyholder liabilities for life insurance or the date of receipt. At year end, an estimate is contracts raised for premiums where notification has not been timeously received. The liabilities under life insurance contracts are valued in terms of the Financial Soundness 1.10 Unearned premium provision Valuation (“FSV”) basis contained in SAP104 issued by the Actuarial Society of South Africa and are The provision for unearned premium comprises reflected as policyholder liabilities under life the portion of premiums written which are insurance contracts in the statement of financial estimated to be earned in future periods. The position. The operating surpluses or losses arising unearned premium provision is calculated from insurance contracts are determined by the separately for each contract at the balance sheet annual actuarial valuation. These surpluses or date using principally the 50% method basis for proportional treaty business and the 365 days basis losses are arrived at after taking into account the for facultative business and non-proportional movement in actuarial liabilities under unmatured business. policies, provisions for profit commissions accrued and adjustments to contingency and other 1.11 Commission expense reserves within the policyholder liabilities as well as recoveries under retrocession agreements. Acquisition costs comprise commission and other variable costs directly connected with the 1.7 Deposits acquisition or renewal of insurance policies. Commission expenses are charged to profit or loss Deposits retained on retrocession placed are stated as incurred and include commission, brokerage, at amortised cost. taxes, and profit commission which is paid to 1.8 Revaluation reserve cedants based on the performance of the contracts underwritten. The company has chosen to disaggregate equity into more classes than the minimum required by 1.12 Investment income creating a revaluation reserve as an additional class Interest income is recognised as it accrues, using within equity. This is to present unrealised gains the effective interest method. Dividends are and losses on investments separately from other recognised when the right of receipt is established.

210 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

1.13 Gain or loss on realisation of investments whether there is any indication of impairment. If there is any indication that an asset is impaired, its Gains or losses on realisation of investments are recoverable amount is estimated. The recoverable calculated on a weighted average basis. amount is the higher of its fair value less costs to sell and its value in use. An impairment loss is 1.14 Income tax recognised in profit or loss whenever the carrying amount of an asset exceeds its recoverable amount. Income tax on profit and loss for the year comprises current and deferred tax. Income tax is recognised In assessing the value in use, the expected future in profit or loss except to the extent that it relates cash flows from the asset are discounted to their to items recognised directly in equity, in which case present value using a pre-tax discount rate that it is recognised in equity, or other comprehensive reflects current market assessments of the time income. value of money and the risks specific to the asset.

Current tax is the expected tax payable on the A previously recognised impairment loss is taxable income for the year, using tax rates enacted reversed if the recoverable amount increases as a or substantively enacted at the reporting date, and result of a change in the estimates used to any adjustment to tax payable in respect of determine the recoverable amount, but not to an previous years. amount higher than the carrying amount that would have been determined (net of amortisation) Deferred tax is provided using the liability method, had an impairment loss not been recognised in providing for temporary differences between the prior years. carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used 1.17 Financial instruments for taxation purposes. The amount of deferred tax provided is based on expected manner of Financial assets are recognised when the company realisation or settlement of the carrying amount becomes a party to the contractual terms that of assets and liabilities, using tax rates enacted or comprise an asset. On initial recognition these substantively enacted at the reporting date. instruments are recognised at fair value or for financial instruments not carried at fair value, the A deferred tax asset is recognised only to the extent cost thereof, including transaction costs. that it is probable that future taxable profits will Subsequent to initial recognition, these be available against which the asset can be utilised. instruments are measured as set out below: Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit Investments will be realised. Investments are classified at fair value through 1.15 Provisions profit or loss. The investments are managed and their performance evaluated and reported A provision is recognised in the statement of internally on a fair value basis in terms of a financial position when the company has a present documented investment strategy. The fair value of legal or constructive obligation as a result of a past listed investments is measured with reference to event, and it is probable that an outflow of their quoted bid prices at the reporting date. economic benefits will be required to settle the obligation. Trade and other receivables

1.16 Impairment Trade and other receivables are stated at amortised cost using the effective interest rate method, less The carrying amounts of the company’s assets are any impairment losses. reviewed at each reporting date to determine

ANNUAL REPORT 2015-2016 211 Notes To The Financial Statements

Cash and cash equivalents diversification of its risk. Retrocession arrangements do not relieve the company from its Cash and cash equivalents comprise cash balances direct obligation to cedants. Amounts recoverable and call deposits with original maturities of three under retrocession contracts are recognised in the months or less. Cash and cash equivalents are same year as the related claim. Amounts stated at amortised cost. recoverable under retrocession agreements are assessed for impairment at each reporting date. Financial liabilities Such assests are deemed impaired if there is objective evidence, as a result of an event that Non-derivative financial liabilities are recognised occurred after its initial recognition that the at amortised cost, comprising original debt less company may not recover all amounts due. principal payments and amortisations. Premiums retroceded, claims reimbursed and Derecognition commission income are presented in the statement A financial asset is derecognised when the of comprehensive income and statement of company loses control over the contractual rights financial position separately from the gross that comprise an asset and consequently transfers amounts. Deferred retrocession income is the risks and benefits associated with the asset on recognised on a basis consistent with the provision trade date. This occurs when the rights are realised, for earned premiums. expire or are surrendered. A financial liability is 2 Reinsurance risk management derecognised when it is legally extinguished. 2.1 Non-life reinsurance contracts Offset 2.1.1 Risk management objectives and policies for Financial assets and financial liabilities are offset mitigating reinsurance risk and the net amount reported in the statement of financial position when the company has a legally The company reactivated its underwriting non-life enforceable right to set off the recognised reinsurance business as of 1 January 2015 after amounts, and intends either to settle on a net basis, having been in run off since 2002. The cover periods or to realise the asset and settle the liability for all historical reinsurance contracts, which were simultaneously. annual in nature, had expired by the end of 2005. The company’s exposure is therefore limited to the 1.18 Foreign currencies uncertainty surrounding the timing of payment Assets and liabilities in foreign currencies are and severity of claims already incurred under translated to South African Rand at rates of historical reinsurance contracts. This is commonly exchange ruling at the reporting date. referred to as claims development risk.

Foreign currency transactions during the year are Sound underwriting principles are applied when recorded at rates of exchange ruling at the the reinsurance contracts are underwritten. transaction date. Realised and unrealised gains or In order to ensure that each contract was losses on exchange are accounted for in profit and comprehensively evaluated for underwriting and loss during the period that they arise. rating purposes, strict underwriting guidelines, agreed to with the parent company, are followed. 1.19 Retrocession The underwriting guidelines stipulate the type of risks that could be underwritten, as well as the The company retrocedes insurance risk in the exposure per risk that was acceptable. normal course of business for the purpose of limiting its net loss potential through the

212 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

The reinsurance contracts underwritten by the 17 countries of the continent and is also class company comprise: diversified. A significant portion of premium is written from South Africa and Kenya. Although  Property reinsurance: contracts that indemnify hail storm exposures have been considered against physical loss or damage and the exceptional, the company has regarded financial consequences from a loss or damage concentration in Kenya as a primary concern. to land and buildings. To mitigate the underwriting risk and protect the net account it has purchased a whole Transport reinsurance: contracts that  account quota share protection of 90% and indemnify against losses from the possession, 85% for 2015 and 2016 respectively which is use or ownership of a vessel, aircraft or other in line with approval from the Financial craft for the conveyance of persons or goods. Services Board. Based on an internal assessment, the company has calculated a  Accident reinsurance: contracts that indemnify worst case scenario in any one catastrophe and against losses from a variety of risks. These as a matter of precaution also procured an include: Excess of Loss protection for USD 4.75 million -Motor XS USD 250 000. This will protect the capital of the company in any catastrophic event. - Personal accident and health This Excess of Loss cover was effective from - Guarantee 1 April 2015. - Liability  A portion of the historical risks underwrtitten - Engineering by the company pertaining to the run-off book of business was historically retroceded in order - Miscellaneous to mitigate its net exposure. The retrocession The claims liabilities recognised for each of these contracts entered into comprise a combination classes at year end are disclosed in note 6. of proportional and non-proportional treaties. These contracts were recaptured and, as such, The largest claims development uncertainty the company has no protection for the run-off is concentrated in those classes that are classified book of business. as long tail, such as liability and engineering. Long tail business is defined as reinsurance  The company follows robust claims contracts under which claims are typically not assessment procedures to ensure, that the settled within one year of the occurrence of the liability it accepts for claims covered by events giving rise to the claims. In long tail classes, reinsurance contracts is valid and accurate. there is still significant scope for future 2.1.2 Concentrations of reinsurance risk development, positive or negative, both in number of claims, as well as the value of the claims. The Concentrations of risk may arise with a particular claims development risk from reinsurance event or series of events for example in one contracts is largely managed through the following geographical location. actions: 2.1.3 Claims development information  Having operationalised the subsidiary effective 1 January 2015 the goal has been to achieve Consistent with practice in the reinsurance geographical spread. The business has been industry, quarterly statements received from well-diversified across the entire Sub-Saharan reinsurers under proportional reinsurance Africa and it has written premium from across

ANNUAL REPORT 2015-2016 213 Notes To The Financial Statements

contracts, do not detail the date of loss of Risk premium reinsurance claims. Proportional reinsurance contracts make up the largest part of the - Sum assured is payable at death. Premiums company’s business. The majority of the business received are based on current age, sum at risk underwritten is classified as “short-tail” meaning and may be reviewed in some cases. Cover may that claims are settled within a year after the loss be extended to include disability and dread date. In terms of IFRS 4, an insurer need only disease. disclose claims run-off information where Disability uncertainty exists about the amount and timing of claim payments not resolved within one year. - A benefit which is paid out if the assured is totally and permanently disabled from Claims development is monitored in aggregate for carrying out his/her occupation as defined in all loss years. Note 6 provides details of the overall the policy conditions. changes in estimates of claims liabilities created in earlier years. Permanent health insurance 2.2 Life reinsurance contracts - Compensates the assured for loss of income in case of temporary disability or total and 2.2.1 Risk management objectives and policies for permanent disability during the policy term. mitigating reinsurance risk The risk that arises from the reinsurance contracts The company ceased underwriting life reinsurance underwritten in the past is largely managed business during 2002, and entered into a run-off through the following actions: phase. The company remains on risk for life reinsurance contracts underwritten in the past that  The company has no further exposure to have cover periods that extend into the future. treaties that have been commuted. The company is exposed to the uncertainty surrounding the timing, severity and frequency of  As from 1 January 2010 the life retrocession claims under reinsurance contracts. agreements with Revios Ruckvericherung AG (Scor Germany), which ended on 31 December Sound underwriting principles were applied 2009, was replaced with a single agreement historically when the reinsurance contracts were with Scor Africa Limited (Scor Africa), whereby underwritten. In order to ensure that each contract the company’s net retention on any one risk is was comprehensively evaluated for underwriting reduced to a maximum of R750,000, as and rating purposes, strict underwriting guidelines, compared to the previous R2,500,000. The agreed to with the then parent company were agreement is for a quota share of 75% on all followed. The underwriting guidelines stipulated risks, previously 50%, with sums assured the type of risks that could be underwritten, as well capped at R750,000. as the exposure per risk that was acceptable. Scor Africa carries the remaining 25% on quota The significant types of reinsurance contracts share risk to R1,000,000, as well as the excess underwritten in the past, where the company of loss treaty which provides for the remaining remains on risk are summarised below. cover over R1,000,000. An over-rider commission of 10% on all retrocession Term premiums ceded to Scor Africa is payable to - Policy is limited to a defined term. The sum the company as an expense recovery together assured is payable at death should this occur with a profit commission of 50% on Scor during the term. Africa’s annual profits.

214 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

 The company follows robust claims value resulting from adverse changes in prices. assessment procedures to ensure that it pays The company’s objective is to earn competitive valid and accurate claims. The company uses relative returns by investing in a diverse medical officers to assess claims, where portfolio of securities. Portfolio characteristics appropriate. are analysed on a regular basis. The portfolio is invested in various industries as detailed in 2.2.2 Concentrations of reinsurance risk note 10, and the largest investment in any one company comprises 0.14% (2015: 0.09%) of the Concentrations of risk may arise where a particular total assets. event or series of events impact heavily on the company’s resources. The company is not aware of At 31 March 2016, the company’s ordinary any undue concentrations of risk and its portfolio listed equities were recorded at their fair value is generally representative of the risk profiles of the of R4.01 million (2015: R1.76 million). A major life offices in South Africa. hypothetical 25% decline in each share’s price would have decreased profit before taxation 2.2.3 Claims development by R1.0 million (2015: R0.4 million).

In terms of IFRS 4: Insurance Contracts, claims  Interest rate risk development information need only be presented where uncertainty exists about the amount and Fluctuations in interest rates impact on the timing of claims payments not resolved within one value of government securities and corporate year following the date of the loss. The company bonds and the interest returns from these has been in run-off for approximately 14 years. The investments. The maturity profile of these number of new claims reported is limited and as a instruments is set out in note 10. It is estimated result run-off information is eratic. Claims that a 2% increase in interest rates for these development information is therefore not investments would have increased the presented. Refer to note 6 for the estimates company’s 2016 profit before taxation by less maturity profile. than R150,000 (2015: R50,000).

3 Financial risk  Foreign currency risk

Transactions in financial instruments result in the The company is exposed to foreign currency company assuming financial risks. These include risk for transactions that are denominated in a market risk, liquidity risk and credit risk. Each of currency other than Rand. The company is these risks is described below, together with ways writing business in sub-Saharan African in which the company manages these risks. countries. In more than 80% of the contracts, the transacting currency is US dollar. Initially 3.1 Market risk the company’s focus is to build foreign currency reserves and match dollar liabilities Market risk can be described as the risk of a change with dollar assets. in the fair value of a financial instrument brought about by changes in interest rates, equity prices, or 3.2 Liquidity risk foreign exchange rates. The company ensures that the solvency of the Equity price risk  company meets the regulatory requirements at all times by maintainig a high level of liquidity. The portfolio of listed equities, which are stated at fair value at reporting date, has exposure to The company follows the regulatory provisions, in price risk, being the potential loss in market conjuction with prudential norms laid out by the

ANNUAL REPORT 2015-2016 215 Notes To The Financial Statements

Board, with regard to the investment of its funds.  amounts due from reinsurance policyholders; The general investment strategy is to use cash as  amounts due from reinsurance contract the default asset class. In the initial years of intermediaries; operations equity exposure will be maintained at lower levels.  investments and cash equivalents; and  retroceded technical liabilities. Expected cashflows of liabilities: Exposure to individual policyholders and groups Carrying 1 2 More of policyholders are monitored as part of the credit amount year years than 2 control process. Reputable financial institutions are years used for investing and cash handling purposes. Deposits 375,711,021 375,711,021 - - withheld Under the terms of the retrocession agreements, from retrocessionaires agree to reimburse the ceded retrocessionaires amount in the event that a gross claim is paid. However, the company remains liable to its cedants Amounts due to regardless of whether the retrocessionaire meets companies on the obligations it has assumed. Consequently, the reinsurance company is exposed to credit risk. contracts 8,461,983 8,461,983 - - Other GIC Re South Africa Ltd reinsures with its parent, accounts General Insurance Corporation of India (GIC Re) payable 534,431 534,431 - - which has been continously rated A- (Excellent) by AM Best for at least the last 5 years and AAA (In) Maturity of Technical liabilities under insurance contracts for Claim Paying ability by the Indian rating agency, have been included in Note 6 - 9. Credit Analysis & Research Ltd (CARE). The parent company is wholly owned by the Government of The company is accumulating foreign currency India with sovereign security. As per AM Best, GIC reserves and not intending to convert foreign Re ranked 15th among the Top 50 Global currency funds into Rand during the next 2 years. reinsurance groups in terms of Gross Written All these funds are invested in short-term deposits in the form of fixed or call deposits. Premium. As at 31 March 2015, it has a net worth of approximately USD 2 billion and total assets of For Rand funds, the fund managers are instructed USD 12.5 billion. to keep funds invested in such a way as to offer maximum flexibility and high liquidity. From Calender year 2016, GIC Re South Africa Ltd arranged a 85% whole account quota share treaty Over and above these liquidity measures, a letter whereby 85% of the claims incurred are recovered of comfort given by the parent company provides from GIC Re India. In addition to this GIC Re South support to the company in order to maintain Africa Ltd continues to withhold 40% of the adequate capital, to meet solvency and policy premium as an unearned premium reserve deposit holder liability requirements and financial and retain 100% of the outstanding claims reserve obligations. as an outstanding claims reserve deposit. 3.3 Credit risk None of the company’s financial assets exposed to The company has several exposures to credit risk, credit risk are past due or impaired. which is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where the company is exposed to credit risk are:

216 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

Age analysis of amounts due from companies on reinsurance contracts

Total Current 30 days 60 days 90 days More than 120 days Amounts due 200,469,156 156,986,584 2,561,272 2,089,090 16,389,148 22,443,062

Analysis of the credit quality of the company’s assets BBB and Not AAA AA A lower Rated Total RR R RRR 2016 Technical assets under insurance contracts - - 374,058,606 - 43,861,313 417,919,918 Investments Government securities - - - 6,779,132 - 6,779,132 Negotiable Certificate of Deposit - - - 25,810,763 - 25,810,763 Fixed Deposits - - - 206,610,408 - 206,610,408 Accounts receivable 3,672,300 2,555,538 63,200,612 58,498,035 72,844,845 200,771,330 Cash and cash equivalents - - 37,541,978 - 37,541,978 3,672,300 2,555,538 437,259,217 335,240,316 116,706,158 895,433,529 2015 Technical assets under insurance contracts - - 110,324,409 - 14,329,153 124,653,562 Investments Government securities - - - 2,077,031 - 2,077,031 Negotiable Certificate of Deposit 8,169,528 8,169,528 Fixed Deposits - - Accounts receivable 5,659,463 19,134,719 26,080,616 23,115,903 40,124,737 114,115,438 Cash and cash equivalents - - - 33,283,828 - 33,283,828 5,659,463 19,134,719 136,405,025 66,646,290 54,453,890 282,299,387 The company’s maximum exposure to credit risk is analysed in the table above.

ANNUAL REPORT 2015-2016 217 Notes To The Financial Statements

The assets as above are based on external credit Level 1 ratings obtained from various reputable rating Quoted market price in an active market for an agencies like Fitch and Standard and Poor’s. The identical instrument. international rating scales are based on long-term investment horizons under the following broad Level 2 investment grade definitions: Valuation techniques based on observable inputs, AAA The financial instrument is judged to be of either directly (i.e. as prices) or indirectly (i.e. the highest quality, with minimal credit risk derived from prices). This category includes and indicates the best quality issuers that are instruments valued using quoted market prices in reliable and stable. active markets for similar instruments; quoted prices for identical or similar instruments in markets AA The financial instrument is judged to be of that are considered less than active; or other high quality and is subject to very low credit valuation techniques where all significant inputs risk and indicates quality issuers. are directly observable from market data. A The financial instrument is considered upper- Level 3 medium grade and is subject to very low credit risk although certain economic Valuation techniques using significant situations can more readily affect the issuers’ unobservable inputs. This category includes all financial soundness adversely than those instruments where the valuation technique rated AAA or AA. includes inputs not based on observable data and the unobservable inputs have a significant effect BBB The financial instrument is subject to on the instrument’s valuation. This category moderate credit risk and indicate medium includes instruments that are valued based on class issuers, which are currently satisfactory. quoted prices for similar instruments where *Amount receivable is net of provision for doubtful significant unobservable adjustments or debts of R1.09 million assumptions are required to reflect differences between the instruments. Fair value hierarchy

The table below analyses assets carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1 Level 2 Level 3 Total 2016 Financial assets designated at fair value through profit or loss 15,176,307 44,806,327 - 59,982,634 15,176,307 44,806,327 - 59,982,634

Level 1 Level 2 Level 3 Total 2015 Financial assets designated at fair value through profit or loss 7,958,238 57,597,132 - 65,555,370 7,958,238 57,597,132 - 65,555,370

The unit trust is valued with the unitisation pricing methodology based on quoted market prices.

218 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

Collective Investment schemes are valued based Notified claims on its unit price or the net asset value (NAV), depending on the market value of the underlying Claims notified by cedants are assessed with due investments in which the pool of money is invested. regard to the specific circumstances, information Its yield is calculated by taking the interest and available from the cedant and/or loss adjuster and income receivable of all the instruments in the fund past experience with similar claims. The company divided by the net asset value, expressed as a employs staff experienced in claims handling and nominal annual rate. rigorously applies standardised policies and procedures around claims assessment. Capital management The ultimate cost of the reported claims may vary The company recognises equity and reserves as as a result of future developments or better capital and Management closely monitors the information becoming available about current company’s capital position relative to the economic circumstances. Estimates are therefore reviewed and regulatory requirements. The company regularly and followed up with the cedant to submits quarterly and annual returns to the ensure that it is still current. Financial Services Board in terms of the Short-term Insurance Act, 1998 and the Long - term Insurance Incurred but not reported claims (IBNR) Act, 1998. The company is required to at all times to maintain a minimum capital adequacy IBNR provisions were recognised in terms of the requirement as defined in the Short-term Insurance interim measures communicated by the Financial Act and the Long-term Insurance Act. Services Board (FSB). These are deemed appropriate based on the reporting delays Under the new regulatory regime, Solvency experienced by the company. Assessment and Management (SAM), the legislative requirements will change significantly. 4.1.2 Premium provisions and deferred commission The company with the assistance of its consulting actuary, has addressed the capital needs under the Unearned premium provisions and deferred new regime and have complied with the commission assets have been recognised. transitional reporting requirements as Proportional treaties are provided for at 50%, Non- communicated by the Regulator. Proportional treaties at 75% and for Facultative the 1/365th basis is used. 4 Technical provisions and liabilities under insurance contracts 4.1.3 Assumptions Insurance risks are unpredictable and the company recognises that it is impossible to forecast with As a reinsurer it is necessary to estimate absolute precision claims payable under insurance proportional premiums earned, but not yet contracts. Over time, the company has developed reported by cedants (pipeline premiums a methodology that is aimed at establishing estimates). These have been estimated with insurance provisions and liabilities that have a reference to the estimated premium income (EPI) reasonable likelihood of being adequate to settle from the signed treaty agreements. all its insurance obligations. Assumptions based on actual claims experience to 4.1 Non-life reinsurance contracts date have been used in determining the claim provisions. 4.1.1Claim provisions

The outstanding claims provisions include notified Profit commissions are payable to cedants based claims as well as incurred but not yet reported on the performance of the contracts underwritten claims. Outstanding claims provisions are not and are estimated with reference to premiums and discounted. claims recorded in the financial statements.

ANNUAL REPORT 2015-2016 219 Notes To The Financial Statements

4.1.4 Recoverability of Insurance Receivables The ultimate cost of the reported claims may vary as a result of future developments or better Amounts due from cedants have been assessed for information becoming available about current an indication of impairment due to significant circumstances. Estimates are therefore reviewed financial difficulty, a breach of contract or other regularly and followed up with the cedant to observable data indicating a measurable decrease ensure that it is still current. in the future cash recoverable. This may include adverse changes in the payment status of cedants 4.2.2 Policyholder liabilities or economic conditions that may lead to default of amounts due. The basis adopted in calculating the policyholder liabilities is set out in the notes to the statement of The carrying amount of insurance receivables has actuarial values of life assets and liabilities that been reduced by a provision for doubtful debts and precede the financial statements. The statement the amount of the loss has been recognised in the also details the effect of the changes in statement of comprehensive income. If in future assumptions from 2015. the amount becomes recoverable the previously recognised provisions for doubtful debts will be 4.2.3 Sensitivities in assumptions reversed through the statement of comprehensive The table below demonstrates the impact on the income. loss before tax for a hypothetical worse than 4.2 Life reinsurance contracts expected experience in material assumptions for policyholder liabilities, net of reinsurance. 4.2.1 Outstanding claims

Notified claims

Claims notified by cedants are assessed with due regard to the specific circumstances, information available from the cedant and/or loss adjuster and past experience with similar claims. The company employs staff experienced in claims handling and rigorously applies standardised policies and procedures around claims assessment.

2016 2015 RR 10% worse than expected claims experience (2,883,000) (1,680,000) 10% higher expenses (601,000) (573,000) 1% lower investment margins (525,000) (573,000) 2.5% decrease in lapses (1,000) (455,500)

Each scenario was considered in isolation.

220 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

5 Equipment R R Particulars 31 March 31 March 2016 2015

At cost Equipment 2,244,397 1,849,795 Furniture 911,530 881,926 Motor vehicles 894,325 894,325 4,050,252 3,626,046 Accumulated depreciation Equipment 1,592,357 1,346,429 Furniture 646,495 587,035 Motor vehicles 286,443 107,578 2,525,295 2,041,042 Net book value Equipment 652,040 503,366 Furniture 265,035 294,891 Motor vehicles 607,882 786,747 1,524,957 1,585,004 Equipment Net book value at beginning of year 503,366 37,764 Additions 394,602 561,329 Depreciation (245,928) (95,727) Net book value at end of year 652,040 503,366 Furniture Net book value at beginning of year 294,891 8,316 Additions 29,604 328,137 Depreciation (59,460) (41,562) Net book value at end of year 265,035 294,891 Motor vehicles Net book value at beginning of year 786,747 693,469 Additions - 916,255 Disposals - (592,159) Depreciation (178,865) (230,818) Net book value at end of year 607,882 786,747 Total Net book value at beginning of year 1,585,004 739,549 Additions 424,206 1,805,721 Disposals - (592,159) Depreciation (484,253) (368,107) Net book value at end of year 1,524,957 1,585,004

ANNUAL REPORT 2015-2016 221 Notes To The Financial Statements

6 Provision for outstanding claims

31 March 31 March 2016 2015 Non-Life Life Total Non-Life Life Total RRRRRR Balance at beginning of the period 15,324,490 1,285,595 16,610,085 12,751,665 1,877,672 14,629,337 Gross 41,103,151 1,714,127 42,817,278 12,751,665 4,069,897 16,821,562 Retroceded (25,778,661) (428,532) (26,207,193) - (2,192,225) (2,192,225)

Amounts transferred (to)/from profit or loss 17,479,202 573,098 18,052,300 2,572,825 (592,077) 1,980,748 Gross 193,260,167 1,486,369 194,746,536 28,351,486 (2,355,770) 25,995,716 Retroceded (175,780,965) (913,271) (176,694,236) (25,778,661) 1,763,693 (24,014,968)

Balance at end of the period 32,803,692 1,858,693 34,662,385 15,324,490 1,285,595 16,610,085 Gross 234,363,318 3,200,496 237,563,814 41,103,151 1,714,127 42,817,278 Retroceded (201,559,626) (1,341,803) (202,901,429) (25,778,661) (428,532) (26,207,193)

Property 15,696,461 3,091,101 Miscellaneous 15,631,166 11,041,972 Transport 1,476,065 1,191,417 32,803,692 15,324,490

Estimated maturity profile: Gross 234,363,318 3,200,496 237,563,814 41,103,151 1,714,127 42,817,278 Within one year 180,196,491 2,991,407 183,187,898 28,893,710 1,714,127 30,607,837 Thereafter 54,166,827 209,089 54,375,916 12,209,441 - 12,209,441

Retroceded (201,559,626) (1,341,803) (202,901,430) (25,778,661) (428,532) (26,207,193) Within one year (161,247,701) (1,289,530) (162,537,231) (20,622,929) (428,532) (21,051,461) Thereafter (40,311,925) (52,273) (40,364,198) (5,155,732) - (5,155,732)

Net 32,803,692 1,858,693 34,662,384 15,324,490 1,285,595 16,610,085 Within one year 18,948,790 1,701,877 20,650,667 8,270,781 1,285,595 9,556,376 Thereafter 13,854,902 156,816 14,011,718 7,053,709 - 7,053,709

222 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

7 Policyholder liabilities for life insurance contracts

31 March 31 March Particulars 2016 2015 RR Balance at beginning of year 15,091,466 19,079,317 Gross 20,356,542 25,338,348 Retroceded (5,265,076) (6,259,031)

Amounts transferred (to)/from profit and loss (2,806,547) (3,987,851) Gross (3,374,234) (4,981,806) Retroceded 567,687 993,955

Balance at end of year 17,898,013 15,091,466 Gross 23,730,776 20,356,542 Retroceded (5,832,763) (5,265,076)

Estimated maturity profile: Gross 23,730,776 20,356,542 Within one year 14,978,958 12,005,391 Thereafter 8,751,818 8,351,151

Retroceded (5,832,763) (5,265,076) Within one year (3,883,334) (3,168,889) Thereafter (1,949,429) (2,096,187)

Net 17,898,013 15,091,466 Within one year 11,095,624 8,836,502 Thereafter 6,802,389 6,254,964

ANNUAL REPORT 2015-2016 223 Notes To The Financial Statements

8 Unearned premium reserve

31 March 31 March Particulars 2016 2015 RR Balance at beginning of year 8,761,348 - Gross 87,613,488 - Reinsured (78,852,140) -

Amounts transferred through profit and loss 9,323,665 8,761,348 Gross 95,795,938 87,613,488 Reinsured (86,472,273) (78,852,140)

Balance at end of year 18,085,013 8,761,348 Gross 183,409,426 87,613,488 Reinsured (165,324,413) (78,852,140)

9 Deferred acquisition costs

31 March 31 March Particulars 2016 2015 RR Balance at beginning of year (2,510,186) - Gross 14,329,153 - Reinsured (16,839,339) -

Amounts transferred through profit and loss (365,930) (2,510,186) Gross 29,532,160 14,329,153 Reinsured (29,898,090) (16,839,339)

Balance at end of year (2,876,116) (2,510,186) Gross 43,861,313 14,329,153 Reinsured (46,737,429) (16,839,339) Reinsurance contracts incepted during the current financial period upon reactivation of the non-life reinsurance license. Both the gross and retroceded unearned premium provisions are expected to mature within one year.

Deferred acquisition costs have been recognised on the same bases as the unearned premium reserve.

224 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

10 Investments

31 March 31 March Particulars 2016 2015 RRRR Cost Carrying Value Cost Carrying Value

Negotiable certificates of deposits 25,220,000 25,810,763 8,000,000 8,169,528 Fixed Deposits 205,574,264 206,610,408 - - Ordinary shares - listed 3,964,183 4,013,260 1,837,534 1,760,270 Collective investment schemes - listed 44,550,004 44,806,327 57,288,000 57,597,132 Government bonds - listed 6,812,381 6,779,132 2,104,126 2,077,031 Unit Trust - listed 1,937,437 4,383,915 2,066,366 4,120,937 Total investments at fair value through profit or loss 288,058,269 292,403,805 71,296,026 73,724,898

Listed ordinary shares portfolio analysis

%% Basic Materials 18 40 Consumer Services 5 13 Financials 60 16 Industrials 17 31 100 100

Maturity profile of fixed interest securities

Less than One to More than Total one year five years five years R RRR

2016 Negotiable certificates of deposits 25,810,763 - - 25,810,763 Fixed Deposits 206,610,408 - - 206,610,408 Government bonds - 4,532,003 2,247,129 6,779,132 2015 Negotiable certificates of deposits 8,169,528 - - 8,169,528 Government bonds 2,077,031 - - 2,077,031

The weighted average interest rate of these securities for 2016 is 2.61% (2015: 13.8%).

Details of shareholdings held in companies other than subsidiaries are recorded in a register. This register is available for inspection at the company’s business premises.

ANNUAL REPORT 2015-2016 225 Notes To The Financial Statements

Presented below are the effective interest rates of the company’s interest bearing investments:

31 March 31 March 2016 2015 Negotiable certificates of deposits 7.54% 7.44% Fixed Deposits* 1.78% - Government Bonds 9.00% 13.50% * Interest rate for fixed deposits is low as 96% of the fixed deposits are held in foreign currencies.

11 Deferred taxation

Non-Life Life Total RR R 31 March 2016 Asset at beginning and end of year 5,425,210 545,985 5,971,195

The year-end deferred tax balance comprises: Unrealised loss on revaluation of investments - 441,063 441,063 Provisions 105,957 - 105,957 S24 j interest adjustment (38,958) (45,547) (84,505) Calculated loss 5,358,211 150,469 5,508,680 5,425,210 545,985 5,971,195

31 March 2015 Asset at beginning and end of year 5,425,210 545,985 5,971,195

The year-end deferred tax balance comprised: Unrealised gain on revaluation of investments - 347,342 347,342 Provisions 12,254 - 12,254 S24 j interest adjustment (7,538) (14,808) (22,346) Calculated loss 5,420,494 213,451 5,633,945 5,425,210 545,985 5,971,195

226 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

12 Other accounts payable

31 March 31 March Particulars 2016 2015 RR Accrual for leave pay 378,419 43,765 VAT - 859,087 Other 156,012 97,274 534,431 1,000,126

13 Share capital

31 March 31 March Particulars 2016 2015 RR Authorised 300 000 000 ordinary shares of no par value

Issued 55 750 000 ordinary shares of no par value 111,500,000 111,500,000 111,500,000 111,500,000 The unissued shares are under the control of the directors.

14 Revaluation reserve

31 March 31 March Particulars 2016 2015 RR Investments 1,664,865 1,392,622 1,664,865 1,392,622 The revaluation reserve represents the revaluation of investments which is net of deferred tax.

ANNUAL REPORT 2015-2016 227 Notes To The Financial Statements

15 Net investment income

Non-Life Life Total RR R 31 March 2016 Dividends received - listed 21,916 38,733 60,649 Interest received 5,332,933 2,384,468 7,717,401 Realised gain/(loss) on disposal of investments (154,074) 85,033 (69,041) Net movement in unrealised gains and losses on revaluation and disposal of investments (184,094) 562,210 378,116 5,016,681 3,070,444 8,087,125

31 March 2015 Dividends received - listed - 74,518 74,518 Interest received 5,038,534 1,449,093 6,487,627 Realised gain on disposal of investments 26,746 299,315 326,061 Net movement in unrealised gains and losses on revaluation and disposal of investments (162,314) 140,057 (22,257) Unrealised loss on revaluation of investment in subsidiaries (2,126,447) - (2,126,447) 2,776,519 1,962,983 4,739,502

16 Claims incurred

Non-Life Life Total RR R 31 March 2016 Claims paid (4,628,842) (9,922,586) (14,551,428) Gross (53,733,177) (20,189,681) (73,922,858) Retroceded 49,104,335 10,267,095 59,371,430

Change in provision for outstanding claims (17,479,202) (573,098) (18,052,300) Gross (193,260,167) (1,486,369) (194,746,536) Retroceded 175,780,965 913,271 176,694,236

Claims incurred (22,108,044) (10,495,684) (32,603,728)

228 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

Non-Life Life Total RR R

31 March 2015 Claims paid (491,608) (10,243,555) (10,735,163) Gross 2,638,941 (15,728,588) (13,089,647) Retroceded (3,130,549) 5,485,033 2,354,484

Change in provision for outstanding claims (2,572,825) 592,077 (1,980,748) Gross (28,351,486) 2,355,770 (25,995,716) Retroceded 25,778,661 (1,763,693) 24,014,968

Claims incurred (3,064,433) (9,651,478) (12,715,911)

17 Commission

31 March 31 March Particulars 2016 2015 RR

Commission expense Gross commision and brokerage paid (87,514,850) 25,117,543 Gross deferred acquisition cost 29,532,160 (14,329,153) (57,982,690) 10,788,390

Commission income Retrocession commision and brokerage received 91,241,976 27,908,913 Retroceded overriding commision received 589,229 779,259 Retroceded deferred commission revenue (29,898,090) (16,839,339) 61,933,115 11,848,833

ANNUAL REPORT 2015-2016 229 Notes To The Financial Statements

18 Profit before taxation

31 March 31 March Particulars 2016 2015 RR

Profit before taxation is stated after charging: Employee costs – salaries and bonuses 6,869,417 2,293,699 – employer contributions to defined contribution retirement fund 69,207 249,451 6,938,623 2,543,150

External auditor’s remuneration – audit services 417,300 425,200 – non-audit services 20,000 339,884 437,300 765,084

Consulting fees paid 1,979,734 1,800,052

Depreciation of equipment 484,253 368,107

Operating lease expense 1,009,398 866,232

19 Taxation

Non-Life Life Total RR R 31 March 2016 South African normal tax Current taxation – current year - - - Deferred taxation – current year ------

230 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

Non-Life Life Total RR R

Tax rate reconciliation: % % Standard tax rate 28 28 Dividends received 0.1 - Return transfers previously not recognised and other four funds tax losses - (10) Calculated tax loss for which no deferred tax asset is raised (28) (21) Other - 3 Effective tax rate 0 0

31 March 2015 South African normal tax Current taxation – current year - - - Deferred taxation – current year ------

Tax rate reconciliation: %% Standard tax rate 28 28 Dividends received (1) - Deferred tax not raised on unrealised losses for subsidiaries 27 - Return transfers previously not recognised and other four funds tax losses - (21) Calculated tax loss for which no deferred tax asset is raised (54) (10) Other - 3 Effective tax rate 0 0 The policyholder funds relating to life insurance contracts have calculated tax losses. At year end a deferred tax asset was not raised for these losses as it is not probable that the company will generate sufficient taxable income in the foreseeable future to utilise the loss and the benefit does not accrue to the company.

Deferred tax has been raised in respect of non-life business to the extent of R5,4 million (2015: R5,4 million). Assessed losses of R7,3 million (2015: R3,6 million) have not been recognised as it is uncertain whether further losses will be offset by taxable income in future.

ANNUAL REPORT 2015-2016 231 Notes To The Financial Statements

20 Related party transactions

20.1 Identity of related parties

The current holding company is General Insurance Corporation of India, which acquired 100% of the company’s shares on 24 April 2014.

20.2 Transactions with key management personnel

The remuneration of the executive general management, who are key management personnel of the company, is set out below in aggregate.

Particulars 2016 2015 RR Directors emoluments are set out below: - Salaries and bonuses YR Sunkara Managing director 2,188,272 1,000,000* 2,188,272 1,000,000

- Fees S Bhikha Non-executive director 215,000 135,000 CI Moosa Non-executive director 165,000 100,000 J Bagg Non-executive director 200,000 145,000 580,000 380,000 Other non-executive directors of GIC Re South Africa Ltd are appointed by GIC Re India (parent company) do not earn any remuneration for their services pertaining to the company. Key personnel - Salaries and bonuses I Blaikie Public Officer, Company Secretary, General Manager - Life 1,093,010 1,378,850 S Karmarkar Chief Operating Officer 660,314 188,000** SK Jangir Chief Finance Officer 412,536 117,500** Z Ahmad Chief Underwriting Officer 332,054 94,000** SKR Chintapalli Chief Technology Officer, Manager – HR, Manager Admin 332,048 94,000** 2,829,962 1,872,350 * From August 2014 to March 2015 ** From November 2014 to March 2015

232 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

20.3 Other related party transactions The following transactions were entered into with the previous holding company, its subsidiaries and other related parties on commercial terms and conditions prior to 24 April 2014:

2016 2015 RR

Statement of comprehensive income effects : - consulting fees paid White Chocolate Mountain Trust - 896,672 - interest on loans received Directors - 16,153 - motor vehicle rental received White Chocolate Mountain Trust - 123,121 - administration fees received Saxum Insurance Limited - 1,000,000 - motor vehicle distributed - 592,159 - dividend in specie - 42,021,633 The following transactions were entered with the current holding company (General Insurance Corporation of India) : Statement of comprehensive income effects : Retroceded premiums to holding company 285,915,150 122,183,759 Retroceded claims from holding company (219,738,879) (22,648,112) Retroceded commission from holding company (91,168,479) (10,580,531) Statement of financial position effects : Retroceded oustanding claims 201,559,626 25,778,662 Retroceded unearned premium provision 165,324,413 78,852,140 Retroceded defered acquisition cost (46,737,429) (16,839,339) Retroceded reserve deposit 375,711,021 80,392,245 Retroceded receivables 20,643,312 -

ANNUAL REPORT 2015-2016 233 Notes To The Financial Statements

21 Commitments and contingencies Particulars 2016 2015 RR The company entered into a lease agreement for the rental of its premises for a period of three years with an escalation of 9% per annum. Future rentals payable under the operating lease as at year end is: Within one year 791,932 371,540 One to five years 1,412,060 - 2,203,992 371,540 The operating lease was renewed on 01 November 2015 and expires on 31 October 2018. 22 Other company information has continuing involvement in the asset. The company expects to adopt the amendment for the Business first time in the 2017 annual financial statements. It is unlikely that the amendment will have a The company is a composite reinsurer that was material impact on the company’s financial previously in run-off and as of 1 January 2015 statements. began writing non-life reinsurance business. IFRS 9: Financial Instruments Dividends On 24 July, the IASB issued the final IFRS 9 Financial No dividends were paid during the year (2015 : the Instruments Standard, which replaces earlier subsidiaries were declared as a dividend in specie versions of IFRS 9 and completes the IASB’s project at their carrying value, on the dividend declaration to replace IAS 39 Financial Instruments: date of 24 April 2014 for R42 021 633.) Recognition and Measurement.

Going concern This standard will have a significant impact on the company, which will include changes in the The directors believe that the company will be a measurement bases of the company’s financial going concern in the future. assets to amortised cost, fair value through other 23 New standards, amendments and interpretations comprehensive income or fair value through profit to existing standards that are not yet effective or loss. Even though these measurement and have not been early adopted by the categories are similar to IAS 39, the criteria for company classification into these categories are significantly different. In addition, the IFRS 9 impairement model Amendment to IFRS 7: Financial Instruments: has been changed from an “incured loss” model Disclosures: Annual Improvements project from IAS 39 to an “expected credit loss” model, which is expected to increase the provision for bad The amendment provides additional guidance debt recognised in the company. regarding transfers with continuing involvement. Specifically, it provides that cash flows excludes The standard is effective for annual periods cash collected which must be remitted to a beginning on or after 1 January 2018 with transferee. It also provides that when an entity retrospective application. Early adoption is transfers a financial asset but retains the right to permitted. service the asset for a fee, that the entity should apply the existing guidance to consider whether it

234 ANNUAL REPORT 2015-2016 Notes To The Financial Statements

24 Revenue account split between non-life and life reinsurance contracts

Total Non-life Life

31 March 31 March 31 March 31 March 31 March 31 March Note 2016 2015 2016 2015 2016 2015 RR RRR R Gross premiums written 331,818,342 155,877,705 315,699,944 135,759,733 16,118,398 20,117,972 Retroceded premiums (291,781,769) (129,976,349) (285,915,150) (122,183,759) (5,866,619) (7,792,590) Gross UPR movement (95,795,938) (87,613,488) (95,795,938) (87,613,488) - - Retro UPR movement 86,472,273 78,852,140 86,472,273 78,852,140 - - Net premiums written and earned 30,712,908 17,140,008 20,461,129 4,814,626 10,251,779 12,325,382 Claims incurred (32,603,728) (12,715,911) (22,108,044) (3,064,433) (10,495,684) (9,651,478) Claims paid 16 (14,551,428) (10,735,163) (4,628,842) (491,608) (9,922,586) (10,243,555) Gross (73,922,858) (13,089,647) (53,733,177) 2,638,941 (20,189,681) (15,728,588) Retroceded 59,371,430 2,354,484 49,104,335 (3,130,549) 10,267,095 5,485,033 Change in provision for outstanding claims 6 (18,052,300) (1,980,748) (17,479,202) (2,572,825) (573,098) 592,077 Gross (194,746,536) (25,995,716) (193,260,167) (28,351,486) (1,486,369) 2,355,770 Retroceded 176,694,236 24,014,968 175,780,965 25,778,661 913,271 (1,763,693) Net commission 3,950,425 1,060,443 3,524,003 1,231,147 426,422 (170,704) Commissions (paid)/ received 4,316,355 3,570,629 3,889,933 3,741,333 426,422 (170,704) Gross (87,514,850) (25,117,543) (87,278,547) (23,678,535) (236,303) (1,439,008) Retroceded 91,831,205 28,688,172 91,168,480 27,419,868 662,725 1,268,304 Net change in deferred acquisition cost 9 (365,930) (2,510,186) (365,930) (2,510,186) - - Gross 29,532,160 14,329,153 29,532,160 14,329,153 - - Retroceded (29,898,090) (16,839,339) (29,898,090) (16,839,339) - - Change in provision for policyholder liabilities 7 (2,806,547) 3,987,851 - - (2,806,547) 3,987,851 Gross (3,374,234) 4,981,806 - - (3,374,234) 4,981,806 Retroceded 567,687 (993,955) - - 567,687 (993,955) Underwriting result (746,942) 9,472,391 1,877,088 2,981,340 (2,624,030) 6,491,051 Gross (27,740,136) 96,656,605 (18,571,947) 86,368,653 (9,168,189) 10,287,952 Retroceded 36,682,788 (75,912,680) 30,138,629 (72,115,779) 6,544,159 (3,796,901) Management expenses (18,583,626) (10,204,020) (15,424,375) (4,897,951) (3,159,251) (5,306,069) Net income/(loss) before other income and expenses (19,330,568) (731,629) (13,547,287) (1,916,611) (5,783,281) 1,184,982 Net investment income 7,088,427 4,222,716 4,331,190 2,128,475 2,757,237 2,094,241 Increase in provision for doubtful debts (1,090,621) - (1,090,621) - - - Foreign exchange gain/(loss) 6,676,603 (194,239) 6,676,603 (194,239) - - Profit/(Loss) before taxation 18 (6,656,159) 3,296,848 (3,630,115) 17,625 (3,026,044) 3,279,223 Taxation 19 ------Profit/(Loss) after taxation (6,656,159) 3,296,848 (3,630,115) 17,625 (3,026,044) 3,279,223

ANNUAL REPORT 2015-2016 235 Notes To The Financial Statements

25Notes to the statement of cash flows 25.1 Cash utilised by operations 31 March 31 March Particulars 2016 2015 RR (Loss)/profit before taxation (6,656,159) 3,296,848 Adjustments for: – depreciation of equipment 484,253 368,107 – realised loss/(gain) on disposal of investments 69,041 (326,061) – interest received (7,717,401) (6,487,627) – dividends received (60,649) (74,518) – interest paid 80,882 142,343 – increase in net provision for unearned premium 9,323,665 8,761,348 – increase in net deferred acquisition costs 365,930 2,510,186 – increase in net provision for outstanding claims 18,052,300 1,980,748 – increase/(decrease) in net policyholder liabilities for life insurance contracts 2,806,547 (3,987,851) – unrealised loss on revaluation of investment in subsidiaries - 2,126,447 – unrealised (gain)/loss on revaluation of investments (378,116) 22,257

Cash generated by operations before working capital changes 16,370,293 8,332,227 Increase in amounts receivable from insurance companies (88,376,759) (111,522,371) Decrease/(Increase) in other accounts receivable 1,720,867 (1,090,341) (Decrease)/Increase in amounts payable to insurance companies (9,212,463) 5,740,224 (Decrease)/increase in other accounts payable (465,695) (3,098,094) Increase in deposits withheld from retrocessionaires 295,318,776 80,392,245 215,355,019 (21,246,110)

25.2 Cash and cash equivalents Cash and cash equivalents included in the statement of cash flows comprise the following statement of financial position amounts : Cash on call and on deposit 7,853,065 24,193,019 Cash at bank 29,675,241 9,055,526 Cash on hand 13,672 35,283 37,541,978 33,283,828

236 ANNUAL REPORT 2015-2016 Categorisation of Assets and Liabilities

Categorisation of assets and liabilities - - 5,971,195 6,779,132

liabilities assets and 45 - - 10,763 - assets Non - current 806,327 - 534,431 - 5,711,021 - 8,461,983 - 147,234,404 53,234,752 Current/non - current distinction - current Current/non 375,606,291 42,313,627 428,313,711 63,127,734 and liabilities ther non - Current financial assets - 417,919,918 - 491,441,445 156,012 378,419 inancial O - - ables liabilities at - oans and F - 200,469,156 - - - 206,610,408 206,610,408 Financial assets and liabilities Financial assets receiv and loss fair value designated atdesignated amortised cost and liabilities through profit 6,779,132 6,779,132 - - - - 534,431 - 1,524,957 - - - 1,524,957 - 1,524,957 417,919,918 - 491,441,445 - 5,832,763 - - - 5,832,763 3,883,334 1,949,429 5,971,195 - - - 5,971,195 - 43,861,313 43,861,313 43,861,313 - 46,737,429 23,730,776 ------46,737,429 23,730,776 46,737,429 14,978,958 - 8,751,818 202,901,429 165,324,413 - - - 202,901,429 162,537,231 40,364,198 165,324,413 165,324,413 237,563,814 - 183,409,426 ------237,563,814 183,409,426 183,187,898 183,409,426 54,375,916 - 292,403,805 59,982,634 232,421,171 - - 285,624,673 6,779,132 5 6 8 9 7 6 8 9 7 11 12 Note Total Financial L ompanies 200,469,156 Retroceded outstanding claims Retroceded Retroceded unearned premium reserve acquisition costs Gross deferred policyholderRetroceded liabilities Government securities Fixed depositsNegotiable certificates of depositsListed Unit TrustListed ordinary sharesListed collective investment schemes 25,810,763 44,806,327 - 25,810,763 206,610,408 44,806,327Gross outstanding claims 4,013,260 4,383,915Gross unearned premium reserve - - acquisition cost deferred Retroceded 4,013,260Gross policyholder liabilities 4,383,915 - - - 25,8 - - 44, - 4,013,260 4,383,915 2016ASSETS Equipment contracts assets under insurance Technical Investments tax Deferred Amounts receivable from insurance c Other accounts receivableCash on call and on deposit RCash at bank and on 10 hand assetsTotal LIABILITIES contracts liabilities under insurance Technical RDeposits withheld from Rretrocessionaires Amounts payable to insurance companies 302,174 7,853,065 payable Other accounts 29,688,913 - - 302,174 R 7,853,065 - 29,688,913 956,133,183 375,711,021 - - 8,461,983 59,982,634 470,734,479 - R - - - - 302,17 - - - 7,853,06 - 425,416,070 29,688,913 846,309,520 375,711,021 R 8,461,983 109,823,663 - - 37 R Total liabilitiesTotal 876,148,880 - - 384,329,016 491,819,864 813,021,146 63,127,734

ANNUAL REPORT 2015-2016 237 Categorisation of assets and liabilities

Categorisation of assets and liabilities - liabilities assets and assets Non - current Current/non - current distinction - current Current/non and liabilities ther non - Current financial assets inancial O ables liabilities at oans and F Financial assets and liabilities Financial assets receiv and loss fair value designated atdesignated amortised cost and liabilities through profit 1,000,126 - - 956,361 43,765 1,000,126 - 5,265,076- - - 5,265,076 3,168,889 2,096,187 1,585,004 - - 5,971,195 - 1,585,004 - - - 1,585,004 - 5,971,195 - 5,971,195 73,724,898 65,555,370 8,169,528- - 73,724,898 26,207,193 78,852,140 14,329,153 - - - 26,207,193 78,852,140 21,051,461 14,329,153 78,852,140 42,817,278 5,155,732 14,329,153 87,613,488 16,839,339 20,356,542------42,817,278 - 87,613,488 16,839,33930,607,837 20,356,54287,613,488 16,839,339 12,209,441 12,005,391 8,351,151 - - 124,653,562 - - - 124,653,562 117,401,643 7,251,919 167,626,647 - - - 167,626,647 147,066,055 20,560,592 6 8 9 7 6 8 9 7 5 12 11 Note Total Financial L ompanies 112,092,397 - 112,092,397 - - 112,092,397 - Retroceded outstanding claims Retroceded Retroceded unearned premium reserve acquisition costs Gross deferred policyholderRetroceded liabilities Government securitiesNegotiable certificates of depositsTrustUnit Listed Listed ordinary sharesListed collective investment schemes 8,169,528 57,597,132 2,077,031 57,597,132 outstanding claims Gross 2,077,031 - 1,760,270Gross unearned premium reserve 4,120,937 acquisition cost deferred Retroceded 8,169,528 policyholderGross liabilities 1,760,270 4,120,937 ------8,169,528 57,597,132 2,077,031 - - 1,760,270 - 4,120,937 - - 2015ASSETS Equipment contracts assets under insurance Technical Investments tax Deferred Amounts receivable from insurance c Other accounts receivable R Cash on call and on deposit at bank and on handCash assetsTotal 10 RLIABILITIES contracts liabilities under insurance Technical RDeposits withheld from retrocessionaires Amounts payable to insurance companies 2,023,041 24,193,019Other accounts payable R 9,090,809 - - 353,333,925 80,392,245 R 24,193,0192,023,041- 17,674,446 65,555,370 179,761,813 33,283,828 R ------132,209,761 - R 338,525,807 - - - 14,808,118 80,392,245- 24,193,019 17,674,446 2,023,041 9,090,809 - - - - 80,392,245- 17,674,446 - - Total liabilitiesTotal 266,693,464- - 99,023,052 167,670,412 246,132,872 20,560,592

238 ANNUAL REPORT 2015-2016 GIC RE, INDIA, CORPORATE MEMBER LIMITED

GIC RE, INDIA, CORPORATE MEMBER LIMITED ANNUAL REPORT AND ACCOUNTS 31 DECEMBER 2015

Registered number: 07792458

ANNUAL REPORT 2015-2016 239 GIC RE, INDIA, CORPORATE MEMBER LIMITED

GIC RE, INDIA, CORPORATE MEMBER LIMITED TABLE OF CONTENTS

Page

Directors and Administration 241

Strategic Report 242

Director’s Report 245

Statement of Directors’ Responsibilities 246

Independent Auditor’s Report 247

Annual Accounts:

Profit and Loss Account 248

Balance Sheet 249

Statement of Changes in Equity 251

Cash Flow Statement 252

Notes to the Annual Accounts 253

240 ANNUAL REPORT 2015-2016 GIC RE, INDIA, CORPORATE MEMBER LIMITED

GIC RE, INDIA, CORPORATE MEMBER LIMITED DIRECTORS AND ADMINISTRATION

Directors Auditors

Balaji Thiagarajan KPMG LLP 15 Canada Square Secretary London Leadenhall Insurance Consultants Limited E14 5GL Suite 835 at Lloyd’s Tax Advisors One Lime Street London Mazars LLP EC3M 7DQ Tower Bridge House St Katharine’s Way Registered Office London Suite 835 at Lloyd’s E1W 1DD One Lime Street Banker London EC3M 7DQ Lloyds TSB 113-116 Leadenhall Street Registered Number London 07792458 EC3A 4AX

ANNUAL REPORT 2015-2016 241 GIC RE, INDIA, CORPORATE Strategic Report MEMBER LIMITED

The Director submits his Strategic Report for GIC Re, India, Transition to FRS 102 Corporate Member Limited (the Company) for the year This is the first year that the Company has presented its ended 31 December 2015. results under FRS 102 “The Financial Reporting Standard, Principal Activities applicable in the UK and Republic of Ireland”. The last financial statements under previous UK GAAP were for The Company is incorporated in the United Kingdom the year ended 31 December 2014. The date of transition (U.K.) and is a corporate member of the Society of Lloyd’s to FRS 102 was 1 January 2014. In accordance with FRS (Lloyd’s). The Company underwrites (on a limited liability 102, the Company has identified its insurance contracts basis) on Lloyd’s Syndicate 6118 and Syndicate 6119 (the and accounted for then in accordance with FRS 13 Syndicates). The table below summarises the Company’s “Insurance Contracts”. The impact of the transition to FRS insurance capacity on the Syndicates by underwriting year. 102 is set out in Note 2 ‘Transition to FRS 102’. Syndicate Syndicate Business Review 6118 6119 £000 £000 Key Financial Performance Indicators

Year of Account 2015 2014 2015 In the opinion of the director, the key financial performance indicators below best represent the Company insurance performance and position of the Company before capacity 5,000 14,055 13,473 reinsurance of all of its underwriting business from the Total Syndicate Syndicate to the Parent reinsurer. insurance capacity 48,100 14,055 13,473 2015 Percent of total 10.4% 100% 100% $000

Underwriting years normally close at the end of three Gross written premiums 33,659 calendar years. After the 2012 underwriting year, the Outward reinsurance premiums (6,788) Company discontinued underwriting on Syndicate 4242. Profit for the financial year 1,188 Syndicate 6118 was established since the 2014 Year of Account to provide a dedicated vehicle forexternal Return on capacity 6.43 % investors to participate on Barbican Syndicate 1955 via Non-financial Key Performance Indicators quota share reinsurance, netof quota share cession to Syndicate 6113. Due to the nature of the Company’s operations as a Lloyd’s corporate member, the Syndicate carries out the Syndicate 6119 was established since the 2014 year of majority of the Company’s activities. The Company is not account as a ‘Special Purpose Syndicate’ to underwrite directly involved in the management of the Syndicate’s whole account quota share reinsurance of Catlin activities, including the employment of staff. The Syndicate 2003. This is the only inwards contract that the Syndicate Managing Agent is responsible for the syndicate writes. management of the Syndicate. The Managing Agent also The Parent reinsurer proportionately reinsures all of the has responsibility for the environmental activities of the Company’s underwriting business from the Syndicates.

242 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Strategic Report CORPORATE MEMBER LIMITED

Syndicate, though by their nature, insurers generally do the Company’s support from the next underwriting year not produce significant environmental emissions. if he is not satisfied with the Managing Agent’s response. Therefore, the director does not consider it appropriate The Annual Report of the Directors of the Managing to monitor and report any performance indicators for Agent on the audited annual accounts for the Syndicate staff or environmental matters. details the significant risks and uncertainties facing the Member Outward Reinsurance Arrangement Syndicate. The Managing Agent manages these risks together with the Syndicate’s service providers. The Company proportionally reinsures all of its underwriting business from the Syndicate to its parent Since the Company proportionately reinsures all of its company, General Insurance Corporation of India (‘the underwriting business from the Syndicate to the Parent Parent reinsurer’). Outward reinsurance premiums equal reinsurer, the risks it faces from its participation on the the Company’s share of Syndicate gross premiums, less Syndicate are significantly reduced. The Company, Syndicate outward reinsurance premiums; reinsured however, faces the risk that the reinsurer will not meet liabilities equal the Company’s share of Syndicate losses its reinsurance obligations, though the director considers and expenses, less investment income. The reinsurance this risk remote, since the reinsurer provided a $15.4 contract limits the Company’s net reinsurance recoveries million letter of credit to Lloyd’s (Funds at Lloyd’s) to to the reinsurer’s related funds at Lloyd’s. The reinsurer collateralise its reinsurance obligations to the Company. reimburses the Company for member administrative Operational Risk expenses (including audit and accounting fees and other expenses) limited to £115,000. Since the Company only undertakes in a few transactions of its own, it has limited systems and staffing Risk Review requirements. Therefore, the director does not consider Insurance risks the Company’s operational risks to be significant. Close involvement of the director in the Company’s key As a corporate member of Lloyd’s, most of the significant decision making and the fact that the Syndicate insurance risks and uncertainties facing the Company conducts a majority of the Company’s operations arise from its participation on the Syndicate. The provides control over any remaining operational risk. Company’s role in managing these risks is limited to monitoring the Syndicate’s performance. This starts in Foreign Exchange advance of committing support to the Syndicate for the The Company is exposed to foreign exchange risk following underwriting year, with a review of the through the Syndicates’ liabilities under policies of Syndicate’s business plan as prepared by the Syndicate’s insurance denominated in currencies other than US Managing Agent. During the year, the director monitors Dollars. The most significant currencies to which the and, if necessary, enquires into the Syndicate’s quarterly syndicate is exposed are Pounds Sterling, Canadian reports and annual accounts together with any other Dollar and the Euro. Where possible, the syndicate seeks information made available by the Managing Agent. If to mitigate the risk by matching the estimated foreign the director deems a particular risk in the Syndicate to currency denominated liabilities with assets be excessive, he will seek confirmation from the denominated in the same currency. There is a natural Managing Agent that adequate management of the risk matching to currency risk as claims are normally paid in is in place and, if considered appropriate, may withdraw

ANNUAL REPORT 2015-2016 243 GIC RE, INDIA, CORPORATE Strategic Report MEMBER LIMITED

the currency of the original policy. The Company did not including market conditions and Syndicate performance, undertake any transactions of its own during the year and though Lloyd’s intends for the process to be fair and except for administrative expenses. reasonable, the requirements can fluctuate from one year to the next, which may constrain the amount of Market, Credit, and Liquidity Risk Syndicate insurance capacity that the Company can Other significant risks faced by the Company include its support. investment of available funds within its own custody. The Future Developments elements of these risks are interest rate, investment price, and liquidity risk. Liquidity risk would arise if the The Company will be participating on the following Syndicate had inadequate liquid resources for a large Syndicates for the 2016 Year of Account: claim and sought funds from the Company to pay the  Syndicate 6118 - managed by Barbican Managing claim. In order to minimise interest rate, investment price, Agency Limited. and liquidity risk, the Company invests its funds in readily realisable short term cash deposits.  Syndicate 6119 - managed by Catlin Underwriting Agencies Limited. Since the Company did not undertake many transactions of its own, the director does not consider currency or  Syndicate 6126 - managed by Asta Managing Agency credit risk to be significant. Limited.

Regulatory and Compliance Risk  Syndicate 2014 - managed by Pembroke Managing Agency Limited. The Company is subject to continuing approval by Lloyd’s to be a corporate member of the Syndicate. The Approved by the Board on 28 June 2016 Company tries to reduce the risk of this approval being And signed on its behalf by revoked by monitoring and fully complying with all of Balaji Thiagarajan its Lloyd’s membership requirements. Director The capital requirements to support the proposed Suite 835 at Lloyd’s amount of Syndicate insurance capacity for future years One Lime Street are subject to Lloyd’s requirements. Lloyd’s takes a variety London of factors into account when setting these requirements EC3M 7DQ

244 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Director’s Report CORPORATE MEMBER LIMITED

Registered Number: 07792458 Director’s Report 31 December 2015

The director presents his report below, together with the Directors and Officers Liability Insurance audited accounts for GIC Re, India, Corporate Member The Director is covered against liabilities arising in Limited, for the year ended 31 December 2015 on pages relation to the Company through the global Directors 248 to 267. and Officers policy in place by the Parent Company. This Results is limited to 500,000,000 Indian Rupees.

The Company underwrites on the 2014 and 2015 Year Donations of Account of Syndicate 6119 and the 2015 Year of The Company made no political or charitable donations Account on Syndicate 6118. during the period. Profits for the year ended 31 December 2015 were Disclosure of Information to Auditors $62,000 (2014: $47,000). The director who held office at the approval date of this Dividend report confirms to the best of his knowledge, that there The director does not recommend the payment of a is no relevant audit information of which the Company’s dividend (2014: Nil). auditors are unaware, and he took all action necessary as a Director to become aware of any relevant audit Going Concern information and to establish that the Company’s auditors On the basis of his assessment of the Company’s financial are aware of that information. position and after making appropriate enquiries, the Auditors director reasonably expects the Company has adequate resources to continue in operational existence for the Pursuant to Section 487 of the Companies Act 2006, the foreseeable future. For this reason the annual accounts auditors will be deemed to be reappointed and KPMG are prepared on a going concern basis. LLP will therefore continue in office.

Directors On behalf of the Board

Below are the names of the people who were directors Balaji Thiagarajan of the Company during the period and to the date of Director this report. 28 June 2016 Balaji Thiagarajan Suite 835 at Lloyd’s One Lime Street London EC3M 7DQ

ANNUAL REPORT 2015-2016 245 GIC RE, INDIA, CORPORATE Statement of Director’s Responsibilities MEMBER LIMITED

GIC RE, INDIA, CORPORATE MEMBER LIMITED Registered Number: 07792458 Statement of Director’s Responsibilities in respect of the Strategic Report, the Director’s Report and the Financial Statements 31 December 2015

The director is responsible for preparing the Strategic  make judgements and estimates that are reasonable Report, the Directors’ Report and the financial statements and prudent; in accordance with applicable law and regulations.  state whether applicable UK Accounting Standards Company law requires the director to prepare financial have been followed, subject to any material statements for each financial year. Under that law they departures disclosed and explained in the financial have elected to prepare the financial statements in statements; and accordance with UK Accounting Standards and  prepare the financial statements on the going applicable law (UK Generally Accepted Accounting concern basis unless it is inappropriate to presume Practice), FRS 102 The Financial Reporting Standard that the company will continue in business. applicable in the UK and Republic of Ireland. The director is responsible for keeping adequate Under company law the director must not approve the accounting records that are sufficient to show and financial statements unless he is satisfied that they give explain the company’s transactions and disclose with a true and fair view of the state of affairs of the company reasonable accuracy at any time the financial position and of the profit or loss of the company for that period. of the company and enable him to ensure that the In preparing these financial statements, the director is financial statements comply with the Companies Act required to: 2006. The director has general responsibility for taking  select suitable accounting policies and then apply such steps as are reasonably open to him to safeguard them consistently; the assets of the company and to prevent and detect fraud and other irregularities.

246 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Independent Auditor’s Report CORPORATE MEMBER LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBER Opinion on financial statements OF GIC RE, INDIA, CORPORATE MEMBER LIMITED In our opinion the financial statements: We have audited the financial statements of GIC Re. India,  give a true and fair view of the state of the company’s Corporate Member Limited for the year ended 31 affairs as at 31 December 2015 and of its profit for December 2015 set out on pages 10 to 36. The financial the year then ended; reporting framework that has been applied in their  have been properly prepared in accordance with preparation is applicable law and UK Accounting United Kingdom Generally Accepted Accounting Standards (UK Generally Accepted Accounting Practice) Practice; and FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.  have been prepared in accordance with the requirements of the Companies Act 2006. This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Opinion on other matter(s) prescribed by the Companies Act 2006. Our audit work has been Companies Act 2006 undertaken so that we might state to the company’s In our opinion the information given in the Strategic members those matters we are required to state to them Report and Directors’ Report for the financial year for in an auditor’s report and for no other purpose. To the which the financial statements are prepared is consistent fullest extent permitted by law, we do not accept or with the financial statements. assume responsibility to anyone other than the company Matters on which we are required to report by and the company’s members, as a body, for our audit exception work, for this report, or for the opinions we have formed. We have nothing to report in respect of the following Respective responsibilities of directors and auditors matters where the Companies Act 2006 requires us to As explained more fully in the Directors’ Responsibilities report to you if, in our opinion: Statement set out on page 8, the directors are  adequate accounting records have not been kept, responsible for the preparation of the financial or returns adequate for our audit have not been statements and for being satisfied that they give a true received from branches not visited by us; or and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance  the financial statements are not in agreement with with applicable law and International Standards on the accounting records and returns; or Auditing (UK and Ireland). Those standards require us  certain disclosures of directors’ remuneration to comply with the Auditing Practices Board’s Ethical specified by law are not made; or Standards for Auditors.  we have not received all the information and Scope of the audit of the financial statements explanations we require for our audit.

A description of the scope of an audit of financial Salim Tharani (Senior Statutory Auditor) statements is provided on the Financial Reporting For and on behalf of KPMG LLP, Statutory Auditor Council’s website at www.frc.org.uk/auditscopeukprivate. Chartered Accountants 15 Canada Square London, E14 5GL 08 July 2016

ANNUAL REPORT 2015-2016 247 GIC RE, INDIA, CORPORATE Profit and Loss Account MEMBER LIMITED

Particulars Note 2015 2014 $000 $000 I. TECHNICAL ACCOUNT – GENERAL BUSINESS: Earned premiums, net of reinsurance: Gross premiums written 6 33,659 26,092 Outward reinsurance premiums (33,659) (26,092) Net premiums written - Change in the gross provision for unearned premiums 14 (4,527) (12,170) Change in the provision for unearned premiums reinsurers’ share 14 4,527 12,170 net change in provision for unearned premiums - - Earned premiums, net of reinsurance -- Allocated investment return transferred from the Non-technical Account 7-- Claims incurred, net of reinsurance: 6 Claims paid: Gross amount (192) (142) Reinsurers’ share 192 142 Claims paid - - Change in the provision for claims: 14 Gross amount (15,198) (6,722) Reinsurers’ share 15,198 6,722 Change in provision for claims - - Claims incurred, net of reinsurance -- Net operating expenses 8, 11 - - Balance on Technical Account- General business -- II. NON TECHNICAL ACCOUNT – GENERAL BUSINESS: Balance on the Technical Account – General business -- Investment income - - Unrealised gains on investments - - Investment expenses and charges - - Unrealised losses on investments - - Allocated investment return transferred to general business technical Account - - Foreign exchange gain 20 - Other income 176 189 Other charges (117) (129) Profit on ordinary activities before tax 9 79 60 Tax on profit on ordinary activities 10 (17) (13) Profit on ordinary activities after tax 62 47 Profit for the financial year 62 47 All operations relate to continuing activities. There are no other gains and losses for 2015 or 2014 other than those included in the profit and loss account. Accordingly, a separate statement of comprehensive income has not been prepared. The notes on pages 253 to 267 form part of these annual accounts.

248 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Balance Sheet CORPORATE MEMBER LIMITED

Particulars Note 2015 2014 $000 $000 Assets: Investments: Other financial investments 12 - 111 Reinsurers’ share of technical provisions: 14 Provision for unearned premiums 12,506 8,461 Claims outstanding 21,572 6,882 34,078 15,343 Debtors: Debtors arising out of reinsurance operations 38,980 17,464 Other debtors 273 58 39,253 17,522 Other assets: Cash at bank and in hand 170 559 Other -- 170 559 Prepayments and accrued income: Deferred acquisition costs 3,916 3,690 Other prepayments and accrued income - 623 3,916 4,313 Total assets 77,417 37,848 Liabilities: Capital and reserves: 13 Called up share capital - - Profit and loss account 118 56 118 56

ANNUAL REPORT 2015-2016 249 GIC RE, INDIA, CORPORATE Balance Sheet MEMBER LIMITED

Particulars Note 2015 2014 $000 $000

Technical provisions: 14 Provision for unearned premiums: Gross amount 16,422 12,151 Claims outstanding: Gross amount 21,572 6,882 37,994 19,033 Creditors: Creditors arising out of direct insurance operations - 1 Creditors arising out of reinsurance operations 38,026 18,244 Other creditors including taxation 15 1,230 477 39,256 18,722 Accruals and deferred income 49 37 Total liabilities 77,417 37,848 The financial statements on pages 248 to 267 were approved by the Board of GIC Re, India, Corporate Member Limited on 28 June 2016 and signed on its behalf by: Balaji Thiagarajan Director Registered Number: 07792458

The notes on pages 253 to 267 form part of these annual accounts.

250 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Statement of Changes in Equity CORPORATE MEMBER LIMITED

Particulars Called up Profit and Total Share Capital loss account equity $000 $000 $000

At 1 January 2014 -99 Profit for the year - 47 47 Other comprehensive income - - - Total comprehensive income for the period - 56 56 Transactions with owners, recorded directly in equity Issue of shares - - - Own shares acquired - - - Disposal of own shares - - - Dividends - - - Total contributions by and distributions to owners - - - As at 31 December 2014 - 56 56 Profit for the year - 62 62 Other comprehensive income - - - Total comprehensive income for the period - 118 118 Transactions with owners, recorded directly in equity Issue of shares - - - Own shares acquired - - - Disposal of own shares - - - Dividends - - - Total contributions by and distributions to owners - - - As at 31 December 2015 - 118 118 The notes on pages 253 to 267 form part of these annual accounts.

ANNUAL REPORT 2015-2016 251 GIC RE, INDIA, CORPORATE Cash Flow Statement MEMBER LIMITED

Particulars Note 2015 2014 $000 $000 Cash flow from operating activities Profit before taxation 79 60 Movement in creditors 37,230 35,722 Movement in debtors (37,820) (36,139) Tax paid 11 - Net cash generated from operating activities (500) (357) Cash flow from investing activities Net inflow from purchases and sales of investments 16 111 892 Net cash generated from investing activities 111 892 Net (decrease)/increase in cash and cash equivalents (389) 535 Cash and cash equivalents at the beginning of the year 559 24 Cash and cash equivalents at the end of the year 170 559 The notes on pages 253 to 267 form part of these annual accounts.

252 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

(1) General Information The principal change is explained below: GIC Re, India, Corporate Member Limited (“the 2014 2014 2014 Company”) is a limited company incorporated in the $000 $000 $000 United Kingdom. The address of its registered office UK Adjust- FRS 102 is Suite 835 at Lloyd’s, One Lime Street, London, EC3M GAAP - ment 7DQ. The nature of the Company’s operations and As its principal activities are set out in the Strategic previously report on pages 242 to 244. reported These financial statements have been presented in Balance Sheet US Dollars ($’000) as this is the Company’s functional Opening balance currency, being the primary economic environment at 1 December 2014 9 - 9 in which the Company operates. Gross unearned (2) Basis of Preparation and transition to FRS 102 premiums 11,526 625 12,151 This is the first year these financial statements have Reinsurers’ share of been prepared in accordance with applicable United unearned premiums 11,526 625 12,151 Kingdom accounting standards, including Financial Reporting Standard 102 – ‘The Financial Reporting Deferred Standard applicable in the UK and Republic of acquisition costs 3,496 194 3,690 Ireland’ (‘FRS 102’), Financial Reporting Standard 103 Closing balance at – ‘Insurance Contracts’ (‘FRS 103’) and with the 31 December 2014 56 - 56 Companies Act 2006. For financial years up to and Due to the reinsurance agreement the Company has including the year ending 31 December 2014, the with the Parent reinsurer to proportionally reinsure Company prepared its financial statements in all of its underwriting business from the Syndicate accordance with prior UK GAAP. The financial the above has had no effect on the Company’s profit statements have been prepared on the historical cost and loss account. basis. The date of transition is 1 January 2014. The director, based on his assessment of GIC Re, India, FRS 103 requires that all assets and liabilities arising Corporate Member Limited’s financial position and from an insurance contract are treated as monetary after making appropriate enquiries, reasonably items for foreign currency translation purposes. expects that the company has adequate resources Previously, balances such as unearned premiums and to continue in operational existence for the deferred acquisition costs were treated as non- foreseeable future. For this reason, these annual monetary items. This has the effect of valuing those accounts are prepared on a going concern basis. items at closing rates rather than historic rates.

ANNUAL REPORT 2015-2016 253 GIC RE, INDIA, CORPORATE Notes to the Annual Accounts MEMBER LIMITED

(3) Basis of Accounting for Underwriting Activities (b) Outward Reinsurance Premiums The Company underwrites insurance business on an Outward reinsurance premiums consist of (a) the underwriting year basis through its participation on Company’s share of the Syndicate’s reinsurance Lloyd’s of London (Lloyd’s) Syndicate 6118 and premiums on the outward reinsurance contract Syndicate 6119 (the Syndicates) under agency bound during the period and (b) the Company’s agreements with the Syndicates; each underwriting reinsurance premiums on the outward reinsurance year is a separate annual venture. Agency contracts that it has withits Parent reinsurer to agreements grant underwriting control to the proportionally reinsure all of its underwriting Managing Agent of the Syndicates, and the Company business from the Syndicate. Reinsurance has no access to funds controlled by the Syndicates. transactions do not relieve the Company of its The Syndicates release funds to the Company from primary obligations to its policyholders. the Syndicate Premium Trust Funds when The Company offsets actual or estimated assets and underwriting years close (normally after three liabilities under the outward reinsurance contract calendar years). The Managing Agent assesses the with its Parent reinsurer that proportionately result and net assets for each underwriting year reinsures all of its underwriting business from the based on the insurance policies incepting in that year Syndicate into single net balances, because they do for the membership of that year. The Syndicates may not represent separate assets and liabilities. also release funds early on open underwriting years if the Managing Agent can determine the ultimate (c) Provision for Unearned Premiums profitability of the year with enough accuracy Unearned premiums represent the proportion of (generally at the end of two calendar years). premiums written in the year that relate to the The Company reports its share of the Syndicate’s unexpired terms of policies in force at the Balance underwriting transactions, investment return, and Sheet date, calculated on the basis of established operating expenses in its profit and loss account, and earnings patterns or time apportionment as its share of the Syndicate’s assets and liabilities on appropriate. its balance sheet. The director calculates these shares (d) Provision for Unexpired Risks based on the Company’s participation in the At the balance sheet date, the Company makes a Syndicates as a percentage of the Syndicate’s total provision for unexpired risks where the value of insurance capacity. claims and administrative expenses expected to arise The Syndicates hold assets subject to trust deeds for after the balance sheet date from the insurance the benefit of the Company’s insurance creditors. contracts entered into before the balance sheet date (4) Accounting Policies exceeds the provision for unearned premiums, the amount of premiums receivable under those The director consistently applied the material contracts, after the deduction of any deferred accounting policies below in preparing these annual acquisition costs. accounts. The director calculates the provision for unexpired (a) Gross Premiums Written risks by class of business, after considering related Gross premiums written consist of the Company’s investment returns. No provision for unexpired risks share of premiums on insurance contracts that the was recorded in 2014 or 2015. Syndicate bound during the year, together with any (e) Closed Years of Account adjustments arising in the year to such premiums receivable in respect of business written in prior At the end of the third calendar year that an years. The Company shows premiums gross of underwriting year is open, the year normally closes commissions payable to intermediaries and excludes by way of reinsurance into the following open taxes and fees levied on them. underwriting year. The Managing Agent determines the amount of the reinsurance to close premium

254 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

payable, generally by estimating the cost of claims reinsurance recoveries when it incurs the related notified but not settled at 31 December, together losses. with the estimated cost of claims incurred but not The provision for claims outstanding includes the reported at that date, and an estimate of future estimated cost of claims incurred but not reported claims handling expenses. The open underwriting (IBNR) at the balance sheet date. A variety off year into which the closed underwriting year is estimation techniques are usedgenerally based reinsured bares the risk of any subsequent variation upon statistical analyses of historical experience and in the ultimate liabilities of the closed year. includes adjustments for catastrophes and other The payment of a reinsurance to close premium does significant events, changes in historical trends, not relieve the closed year from its primary economic and social conditions, judicial decisions, obligations for outstanding claims. If the reinsuring and legislation, as necessary. In evaluating the syndicate is unable to meet its obligations and the provision, the director uses the findings of the other elements of Lloyd’s chain of security failed, then Syndicate’s actuaries, which include an associated the closed underwriting year would have to settle third party claims administrator’s loss estimates for the outstanding claims. The director considers the large catastrophes. likelihood of such a reinsurance to close failure to Large claims impacting each relevant business class be remote and therefore deem reinsurance to close are generally assessed separately, being measured as settlement of the liabilities outstanding at the on a case by case basis or projected separately in closure of an underwriting year. The Company order to allow for the possible distorting effect of includes its share of the reinsurance to close the development and incidence of these large premiums payable in its technical provisions at the claims. balance sheet date, and the Company makes no further provision for any potential risk of variation in Due to the Syndicate’s limited history and small the ultimate liability of closed years. population of insured and reinsured claims, the provision for claims outstanding is subject to (f) Run - Off Years of Account significant variability. While the director believes that If an underwriting year is not closed at the end of the recorded provision for gross claims and the third calendar year that it is open (a “run-off” year), reinsurance recoveries is adequate, establishing this the Company makes a provision for the estimated liability is a judgmental and inherently uncertain cost of all known and unknown outstanding process. Therefore, it is possible that actual losses may liabilities of that year. The Managing Agent first not conform to the assumptions that have been used determines the provision on a similar basis to the in determining the amount of this provision. reinsurance to close. The Company, however, Accordingly, the ultimate provision may be determines any subsequent variation in the ultimate significantly greater or less than the outstanding liabilities for that year. Therefore, the Company will amount held at the balance sheet date. The Company continue to report movements in its results from any recognises adjustments to the provision for claims run-off year after the third calendar year until it outstanding in the profit and loss account when secures reinsurance to close. known. Due to its inherent nature Claims IBNR may not be apparent to the insurer until many years after The Company had no run-off years at 31 December the event giving rise to the claim has happened. 2014 or 2015. Classes of business where the IBNR proportion of the (g) Claims Incurred, Net of Reinsurance total reserve is high will typically display greater Gross claims incurred consist of the estimated cost variations between initial estimates and final of settling all claims occurring during the period, outcomes because of the greater degree of difficulty whether reported or not, including related claims of estimating these reserves. Classes of business handling expenses. The Company anticipates where claims are typically reported relatively quickly subrogation recoveries when it sets provisions for after the claim event tend to display lower levels of reported claims. The Company accounts for volatility.

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The director bases the reinsurers’ share of the periods, after considering investment disposals. provision for claims outstanding on the provisions Investment management expenses consist of for reported claims and IBNR, net of estimated investment custodian and management fees. irrecoverable amounts from potential reinsurer The Company first records its investment return in insolvencies based on the type of balance and the non-technical account. The Company then security ratings of the involved reinsurers. transfers this return to the general business technical (h) Acquisition Costs, Net of Reinsurance account to reflect the investment return on funds supporting the Syndicate’s underwriting business; no Acquisition costs consist of the Company’s share of funds outside of those in the Syndicate support the Syndicate related coverholder and ceding Company’s underwriting business. commissions (on inward reinsurance acceptances) primarily related to the production of new and (k) Net Operating Expenses renewal business. The Company defers acquisition The Company recognises operating expenses when costs to the extent that they are attributable to incurred. Operating expenses include acquisition unearned premiums at the balance sheet date and costs and the change in deferred acquisition costs, expenses them as it earns the underlying insurance administrative expenses, and reinsurance contract premiums. The Company includes commissions and profit participation. Administrative acquisition costs in net operating expenses. The expenses consist of: Company defers recoveries of acquisition costs (ceding commissions) from outward reinsurers and i. the Company’s share of Syndicate operating includes them in accruals and deferred revenue. The costs, Company earns ceding commissions as it expenses ii. Managing Agent fees and profit commissions, underlying reinsurance contract premiums and iii. Lloyd’s membership costs, and includes them in net operating expenses under reinsurance commissions and profit participation. iv. the reimbursement of administrative expenses from the Parent reinsurer that proportionately (i) Investments reinsures all of the Company’s underwriting Investments consist of the Company’s share of the business from the Syndicate. Syndicate’s shares and other variable yield securities The Company also includes its share of the and debt securities and other fixed-income Syndicate’s brokerage sharing from reinsurance securities. The Company carries investments at brokers that place reinsurance coverage for the current or market value. Syndicate in administrative expenses. The Company (j) Investment Return recognises brokerage sharing as revenue when Investment return primarily consists of income from brokers place the reinsurance coverage. the Company’s share of the Syndicate’s investments, Reinsurance commissions and profit participation gains and losses on the realisation of investments, consist of (a) the Company’s share of the Syndicate’s and movements in unrealised gains and losses on ceding and contingent profit commissions from investments, net of investment management outward reinsurers and (b) the recovery of expenses. Income from investments consists of acquisition costs from the Parent reinsurer that interest, which the Company recognises when proportionately reinsures all of the Company’s earned. The Company bases realised gains and losses underwriting business from the Syndicate. on investments on the difference between the sale (l) Current Taxation proceeds and the cost of the investment. Movements in unrealised gains and losses on investments The Company makes a provision for current United represent the difference between the carrying value Kingdom (U.K.) taxes based on its taxable result for of investments at the balance sheet date and the the period after considering permanent and timing purchase price of investments in earlier accounting

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differences between the treatment of certain items considered to be applicable. Due to the inherent for book and tax. The Company also makes a subjectivity involved in making such judgements, provision for current U.S. federal tax where due based estimates and assumptions, the actual results and on U.S. taxable income for the period. outcomes may differ. The estimates and underlying assumptions are reviewed on an ongoing basis. (m)Deferred Taxation Revisions to accounting estimates are recognised in The Company makes a full provision for deferred the period in which the estimate is revised, if the taxation on timing differences that result in an revision affects only that period, or in the period of obligation at the balance sheet date to pay more tax, the revision and future periods, if the revision affects or a right to pay less tax, at a future date, at rates both current and future periods. expected to apply when these items reverse based on current tax rates and law. Timing differences arise The management and control of each Syndicate the from the inclusion of items of income and Company participates on is carried out by the expenditure in taxation computations in periods managing agent of that Syndicate, and the Company different from those in which they are included in looks to the managing agent to implement the annual accounts. The Company recognises appropriate policies, procedures and internal deferred tax assets to the extent that it is more likely controls to manage each Syndicate. The critical than not that they will be recovered. The Company accounting judgements and key sources of does not discount deferred tax assets and liabilities. estimation uncertainty set out below therefore relate to those made by the Director in respect of the (n) Foreign Currency Translation Company only, and do not include estimates and The Company’s functional and reporting currency is judgements made in respect of the Syndicates. the U.S. Dollar. The Company measures foreign The critical judgements that the Director has made currency monetary assets and liabilities at the closing in the process of applying the Company’s accounting exchange rate in effect at the balance sheet date. policies and that have the most significant effect on Non-monetary assets and liabilities at the balance the amounts recognised in the statutory financial sheet date are maintained at the rate of exchange statements are discussed below. ruling when the contract was entered into except for non-monetary assets and liabilities arising out of Assessing indicators of impairment insurance contracts which are treated as monetary In assessing whether there have been any indicators of items in accordance with FRS 103 Insurance impairment assets, the Members have considered both Contracts (“FRS 103”). Foreign currency revenues and external and internal sources of information such as expenses are measured at the historical exchange market conditions, counterparty credit ratings and rates in effect at the time of the related transactions. experience of recoverability. There have been no The director used an exchange rate of 1.48 to indicators of impairments identified during the current translate Sterling balances into U.S. Dollars at 31 financial year. December 2015. Key sources of estimation uncertainty (o) Critical accounting judgements and key sources of estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a In applying the Company’s accounting policies, the significant risk of causing a material adjustment to the Director is required to make judgements, estimates carrying amounts of assets and liabilities within the next and assumptions in determining the carrying financial year are discussed below. amounts of assets and liabilities. The Director’s judgements, estimates and assumptions are based Recoverability of receivables on the best and most reliable evidence available at The Company establishes a provision for receivables that the time when the decisions are made, and are based are estimated not to be recoverable. When assessing on historical experience and other factors that are recoverability the Director considers factors such as the

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aging of the receivables, past experience of The management and control of each Syndicate is recoverability, and the credit profile of individual or carried out by the managing agent of that Syndicate, and groups of customers. No provisions have been the Company looks to the managing agent to implement recognised at the year end. appropriate policies, procedures and internal controls to manage each Syndicate, including those in respect of (5) Management of Financial Risk financial risk management. The following qualitative risk The Company is exposed to the following financial risks management disclosures made by the Director relate to in the course of its operating and financing activities: the Corporate only. The quantitative disclosures are  Credit risk made in respect of both the Corporate and the Syndicates.  Liquidity risk Credit risks  Interest rate risk; and Credit risk is the risk that a counterparty to the Foreign exchange risk  Company’s financial instruments will cause a loss to the Company through failure to perform its obligations. The key areas of exposure to credit risk for the Company result through its reinsurance programme, investments and bank deposits. The risk of default by the Parent reinsurer is mitigated by a $15.3m letter of credit provided by the Parent to Lloyd’s (Funds at Lloyd’s) to collateralise its reinsurance obligations to the Company. The Company manages credit risk at the Corporate level by ensuring that investments and cash and cash equivalent deposits are placed only with highly rated credit institutions.The carrying amount of the Company’s financial assets represents the Company’s maximum exposure to credit risk. The tables below show the credit quality of financial assets that are neither past due or impaired.

2015 Syndicate participation $000 AAA AA A BBB BBB or Not rated Total lower Shares and other variable yield securities and unit trusts ------Deposits with credit institutions ------Reinsurer share of claims outstanding - 965 1,653 - 1 193 2,812 Reinsurance debtors - 35,398 2,355 - - 1,066 38,819 Total - 36,363 4,008 - 1 1,259 41,631

258 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

2014 Syndicate participation $000 AAA AA A BBB BBB or Not rated Total lower Shares and other variable yield securities and unit trusts 86 21 - - - - 107 Deposits with credit institutions 1 2 1 - - - 4 Reinsurer share of claims outstanding - 741 - - - - 741 Reinsurance debtors 16 17,804 17 - - - 17,837 Total 103 18,568 18 - - - 18,689

The tables below show the ageing and impairment of financial assets by class on instruments.

2015 Syndicate participation $000 Neither Up to Three to Six Greater Financial Total duenor three six months to than assets that impaired months months one year one year have been impaired

Shares and other variable yield securities and unit trusts ------

Debt securities ------

Deposits with credit institutions ------

Overseas deposits as investments ------

Reinsurer share of claims outstanding 2,812 14 7 3 1 - 2,837

Reinsurance debtors 38,819 93 41 14 3 - 38,970

Cash at bank and in hand ------

Insurance debtors ------

Other debtors 272 - - - - - 272

Total 41,903 107 48 17 4 - 42,079

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2014 Syndicate participation $000 Neither Up to Three to Six Greater Financial Total duenor three six months to than assets that impaired months months one year one year have been impaired

Shares and other variable yield securities and unit trusts ------

Debt securities 107 - - - - - 107

Deposits with credit institutions ------

Overseas deposits as investments 3 - - - - - 3

Reinsurer share of claims outstanding 741 - - - - - 741

Reinsurance debtors 17,804 - - - - - 17,804

Cash at bank and in hand 33 - - - - - 33

Insurance debtors ------

Other debtors 3 - - - - - 3

Total 18,691 - - - - - 18,691

At the Corporate level the Company is no exposed to The following tables detail the Company’s remaining significant credit risk. Consequently a sensitivity analysis contractual maturity for its financial liabilities. The tables for credit risk has not been presented for the Corporate. have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date of Liquidity risk which the Company can be required to pay. Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial instruments. At the Corporate level the Company manages liquidity by continuously monitoring forecast and actual cash flows.

260 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

2015 Syndicate participation $000 No Less 1 to 3 3 to 5 Greater Total stated than years years than maturity 1 year 5 years

Derivatives ------

Deposits received from reinsurers ------

Creditors - - 9,674 - - 9,674

Other ------

Total - - 9,674 - - 9,674

2014 Syndicate participation $000

No Less 1 to 3 3 to 5 Greater Total stated than years years than maturity 1 year 5 years

Derivatives ------

Deposits received from reinsurers ------

Creditors - 2 4,752 - - 4,754

Other ------

Total - 2 4,752 - - 4,754

At the Corporate level the Company is not exposed to 2015 2014 significant liquidity risk. Consequently a maturity profile $000 $000 has not been presented for the Corporate. Impact of 50 basis points Interest rate risk increase on result (10) - Interest rate risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because Impact of 50 basis points of changes in market interest rates. decrease on result 35 - The Company is exposed to the risk of interest rate Impact of 50 basis points fluctuations in respect of cash and cash equivalents. increase on net assets (10) - The table below shows the impact of changes in interest Impact of 50 basis points rates on the profit or loss for the period and on the equity increase on net assets 35 - of the Company. At the Company level the Company is not exposed to significant cash flow interest, consequently a sensitivity analysis for interest rate risk has not been presented for the Corporate.

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Currency risk The Company has delegated sole management and control of its underwriting through each Syndicate to The Company holds both assets and liabilities the managing agent of the Syndicate and it has further denominated in currencies other than Sterling, its undertaken not to interfere with the exercise of such functional currency. It is therefore exposed to currency management and control. The managing agents of the risk as the value of the foreign currency assets and Syndicates are therefore responsible for determining the liabilities will fluctuate in line with changes in foreign insurance transactions to be recognised. As such, exchange rates. disclosures in respect of the assumptions and At the Corporate level the Company manages currency judgements made, and the objectives, policies and risk by ensuring that exchange rate exposures are processed for managing currency risk arising from assets managed within the approved policy parameters. and liabilities are only presented for the Corporate in The table below considers financial assets and liabilities these financial statements. denominated in the currencies of the Company’s principal foreign exchange exposures in aggregate.

Syndicate participation 2015 2014 $000 $000

Sterling (590) (324)

United States Dollar 1,768 293

Euro 528 136

Canadian Dollar 203 88

Australian Dollar 36 -

Japanese Yen 46 -

(6) Segment Reporting The tables below detailthe Company’s underwriting resultsbefore investment return by class of business. 2015 $000

Gross Gross Gross Net Reinsurance Total premiums premium claims operating Balance written searned incurred expenses

Accident and health 8,669 8,076 (5,172) (2,779) (125) -

Motor – third party liability 439 382 (216) (113) (53) -

Marine, aviation and transport 8,969 7,547 (4,180) (1,825) (1,542) -

Fire and other damage to property 15,582 13,126 (5,822) (4,915) (2,389) -

Total 33,659 29,131 (15,390) (9,632) (4,109) -

262 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

2014 $000

Gross Gross Gross Net Reinsurance Total premiums premiums claims operating Balance written earned incurred expenses

Accident and health 6,629 3,104 (1,849) (1,363) 108 -

Motor – third party liability 273 122 (63) (55) (4) -

Marine, aviation and transport 6,614 3,703 (2,035) (980) (688) -

Fire and other damage to property 12,576 6,992 (2,917) (2,673) (1,402) -

Total 26,092 13,921 (6,864) (5,071) (1,986) -

Included in the reinsurance balance are reinsurance (8) Net Operating Expenses commissions and profit participation of $3k (2014: 2015 2014 income of $2k). $000 $000 All insurance business is underwritten in the UK in the Acquisition costs (8,702) (8,121) Lloyd’s insurance market, which has been treated as one Change in deferred geographical segment for the purpose of Segmental acquisition costs 323 3,789 Reporting. Administrative expenses (619) (366) (7) Investment Return Personal expenses (877) (472) 2015 2014 $000 $000 Reinsurance commissions and profit participations 9,875 5,170 Income from investments 192 95 Total - - Realised gains on Net operating expenses represent the Company’s share investments 1 - of expenses incurred directly by the Syndicate, less the Unrealised loss on recovery of these expenses from the Parent reinsurer that investments (8) - proportionately reinsures all of the Company’s underwriting business from the Syndicate. Investment expenses and charges (6) - (9) Profit on Ordinary Activities Before Tax

Reinsurer share of This table details the charges (credits) to profit on investment return (179) (95) ordinary activities before taxation in the non-technical account under other income and charges. --

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2015 2014 (b) Factors Affecting the Tax for the Period $000 $000 This table summarises why the current tax charge (credit) Professional fees 100 97 for the period is different than the tax from applying the Foreign exchange gain (20) - main U.K. corporation tax rate to the Company’s profit on ordinary activities. Other expenses 17 32 2015 2014 Reinsurer reimbursements $000 $000 of member expenses (176) (189) Profit on ordinary (79) (60) activities before tax 79 60 Agreed fees for the audit of these annual accounts are Current tax at 21.5% £9,600 (2014: £4,000). The total balance payable (2014: 21.5%) 17 13 (including fees accrued but not yet due) to the Total current tax 17 13 Company’s auditor at 31 December 2015 was $Nil (2014: $14,969). (c) Factors Affecting Tax Charges in Future Years (10) Tax on Profit on Ordinary Activities The corporation tax rate was reduced from 21% to 20% effective from 1 April 2015. The Budget on 18 March 2015 (a) Analysis of Tax Charge During the Period announced that the UK corporation tax rate will reduce This table summarises the tax charge (credit) on the to 19% on April 2017. These changes in the tax rate will Company’s profit on ordinary activities during the reduce the Company’s future current tax charge period. accordingly. 2015 2014 (11) Director’s Compensation and Staffing $000 $000 The director did not receive any compensation for his Current tax: services during 2015 (2014: $Nil). UK corporation tax 17 13 The Company has no employees. Foreign tax - - Total current tax 17 13 Deferred tax: - - Tax on profit on ordinary activities 17 13 (12) Other Financial Investments 2015 2014 $000 $000 Market value Cost Market value Cost Shares and other variable yield securities - - - - Debt securities and other fixed income securities - - 107 107 Overseas deposits 4 4 Total - - 111 111 All debt securities and other fixed-income securities are listed.

264 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

The Company did not have any financial investments the use of models or other valuationmethodologies. held at 31 December 2015. Level 2 inputs include quoted prices for similar (i.e. not identical) assets in active markets, quoted prices for The investments held at 31 December 2014 are carried identicalor similar assets in markets that are not active at fair value through profit and loss and have been or in which little information is released publicly, unlisted categorised between the three levels of the fair value deposits held with creditinstitutions in active markets, hierarchy that reflects the observability and significance low volatility hedge funds where tradeable net asset of inputs used when establishing the fair value. values are published. Level 1 Level 3 Inputs to Level 1 fair values are quoted prices in active Inputs to Level 3 fair values are inputs that are markets for identical assets. An active market is one in unobservable for the asset. Unobservable inputs have which transactions forthe asset occur with sufficient been used to measure fair valuewhere observable inputs frequency and volume to provide pricing information are not available, allowing for situations where there is on an ongoing basis. Examples are listed debtsecurities little or no market activity. Unobservable inputs in active markets or listed equities in active markets or reflectassumptions that the Society considers that listed deposits held with credit institutions in active market participants would use in pricing the asset and markets. have been based on a combination ofindependent third Level 2 party evidence and internally developed models. Inputs to Level 2 fair values are inputs other than quoted The table below sets out the Company’s financial prices included within Level 1 that are observable for investments held at fair value through profit and loss by the asset, either directly(i.e. as prices) or indirectly (i.e. level of hierarchy. derived from prices) and fair value is determined through 2014 Level 1 Level 2 Level 3 Held at Total Fair value hierarchy 2014 2014 2014 amortised 2014 $000 $000 $000 cost 2014 $000 $000 Shares and other variable yield securities - - --- Debt securities and other fixed income securities 21 86 107 Overseas deposits 1 3 --4 22 89 --111

(13) Capital and Reserves 2015 2014 The Company had one authorised, issued, and fully paid $000 $000 up ordinary share with a nominal value of £1 at the Profit and loss account at balance sheet date.At 31 December this share was issued beginning of year 56 9 and paid. Profit for the financial year 70 47 This table reconciles the movement in the profit and loss account during the period. Profit and loss account at end of year 126 56

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(14) Technical Provisions This table summarises the gross and reinsurers’ share of claims outstanding by category. 2015 $000 2015 $000 Provision Claims for unearned outstanding Gross Reinsurers’ premiums share Gross technical Claims notified 5,778 5,778 provisions: Claims IBNR 15,794 15,794 At 1 January 2015 8,461 6,882 Total 21,572 21,572 Foreign exchange (15) Other Creditors differences (482) (508) 2015 2014 Movement in provision 4,527 15,198 $000 $000 At 31 December 2015 12,506 21,572 US federal excise taxes Reinsurers’ share of and other taxes payable - - technical provisions: Amounts owed to At 1 January 2015 12,236 6,882 associated and group Foreign exchange companies - 42 differences (341) (508) Amounts recoverable Movement in provision 4,527 15,198 from Syndicate - - At 31 December 2015 16,422 21,572 Amounts owed to others 1,232 435 Net technical provisions: Total 1,232 477 At 1 January 2015 (3,775) - Foreign exchange differences (141) - At 31 December 2015 (3,916) -

266 ANNUAL REPORT 2015-2016 GIC RE, INDIA, Notes to the Annual Accounts CORPORATE MEMBER LIMITED

(16) Net Portfolio Investment At Change in Cash Flow At 31 1 January Market Value $000 31 December 2015 2015 Movement in net portfolio investment $000 $000 $000 Shares and other variable yield securities - - - - Debt securities and other fixed income securities 107 - (107) - Overseas deposits 4 - (4) - 111 - (111) -

At Change in Cash Flow At 1 January Market Value $000 31December 2014 2014 2014 Movement in net portfolio investment $000 $000 $000 Shares and other variable yield securities 186 - (186) - Debt securities and other fixed income securities 794 - (687) 107 Overseas deposits 23 - (19) 4 1,003 - (892) 111

(17) Funds at Lloyd’s TheCompany’sParent company proportionately reinsures all of the Company’s underwriting results from the Syndicate and provided a $15.3 million letter of credit to Lloyd’s tocollateralise its reinsurance obligations to the Company. (18) Immediate and Ultimate Parent The Company’s immediate and also its ultimate parent is the General Insurance Corporation of India, a company registered in India. (19) Related Parties The Parent Company, General Insurance Corporation of India (wholly owned by the Government of India), proportionally reinsures all of the Company’s Underwriting results from the Syndicates. (20) Contingent Liabilities Legal Proceedings The Syndicate and wider group are regularly involved in various legal proceedings in the ordinary course of their insurance business. The director believes the outcome of these proceedings will not have a material adverse effect on the Company’s financial position or future profitability.

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